Tuesday, September 11, 2012

Moody's - Another Downgrade Coming if Debt Not Reduced

Moody's is sending out a warning to Washington, get your fiscal house in order or face another downgrade.  Despite efforts by Democrats and the mainstream media to try and blame Republicans for last years debt ceiling negotiations breakdown that lead to the first credit downgrade in U.S. history, a new book by Bob Woodward reveals the responsibility lays squarely at Obama's feet.

In the Price of Politices Woodword writes about how Harry Reid's Chief of Staff responded after Obama stated he didn't trust House Majority Leader Beohner:
I didn’t create this situation. The first thing that baffles me is, from my private-sector experience, the first rule that I’ve always been taught is to have a Plan B. And it is really disheartening that you, that this White House did not have a Plan B.
On the way back to the Capital Harry Reid said to his chief of staff, "He needed to hear it, and nobody was telling him."

Woodward writes on the opinions of the ranking Democrat in the House Budget Committee, "The administration didn’t seem to have a strategy. It was unbelievable. There didn’t seem to be any core principles."

Larry Summers told Woodward, "Obama, he really didn’t like these guys," speaking of the House Republicans.  Woodward goes on to describe the president as aloof and adhering to stereotypes.  From the outset, Woodward implies, Obama refused to give in on his position.  In the end, Woodward writes, "Nobody was in charge."

Despite Woodward's first hand accounts of what went on in the White House, the media continues to try and distort the truth.  In an interview with Dianne Sawyer of ABC News, the same news organization headed by the husband of Obama's Special Assistant to the President, she did her best to try and deflect the blame from the White House.  Woodward's response was simple but effective, "I am not delivering ammunition. I am trying to describe what happened."

S&P, after issuing the first credit rating downgrade of the U.S. also reitterated the reason for the downgrade, as a failure to "develop a 'credible' plan to tackle the nation's long-term debt."

In Moody's most recent warning the reveal exactly why a second downgrade is looming and it has everything to do with out-of-control federal spending.  To prevent the downgrade Moody's is looking for:

[S]pecific policies that produce a... downward trend in the ratio of federal debt to GDP over the medium term.
In order to keep the credit outlook of the United States stable, Moody's wants to see a reduction in federal debt.  This reduction can only come in any meaningful way through dramatically decreased spending.

The President prescription for the country's economic woes is four more years of the same, but can America survive four more years of reckless spending by Democrats?

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