... the public to address the underlying cause of the downgrade which is we borrow too damn much.
Nevermind the glaring
$2 trillion dollar mistake that S&P made in it's calculations. The underlying cause as stated in S&P's paper is the intransigence of the republicans to even consider revenue increases.
In fact, revenue as a percentage of GDP is the lowest it's been in
60 years. The
real underlying cause of
this is our low effective tax rate (The Bush tax cuts just eviscerated our budget balance), the recession, and the fact that corporations have been shifting manufacturing to areas where it is easier for them to exploit workers, the environment, and governments. U.S. coporations are sitting pretty with the largest amount of tax reserves in U.S. history. We could do something about it, but our government is captured by corporate money and republican talking points about being "taxed too much." But if you take Germany, for example, they have tighter regulations, stronger unions, and they tax their corporations at a higher rate. Despite this, their unemployment rate is about 6% versus ours at 9.2% (14% if you count underemployed).
The sad part about this so-called "debt crisis" is the degree that it is just a manufactured crisis. Our debt to GDP ratio is
less than France's and they have a AAA rating. Investor's know this. They know that our deficit will return to the black as the economy recovers, and we remove the Bush tax cuts and the wars in Afghanistan and Iraq end. Otherwise investors would have fled treasuries, but instead, investors
gobbled them up. Why do that if you're concerned about our ability to pay our bills?
There is little danger that we are going to suffer further downgrades as you seem to indicate. In fact, the S&P indicated that they would put back our AAA rating if we
allow the Bush Tax cuts on the highest earners to lapse in 2013, as they are supposed to do.
Edited by DBlevins, : formatting paragraphs
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