I’m down with an overdue downgrade

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Listen carefully……hear that?

No you didn’t hear the world ending apocalypticly with a reverse big bang,  because the world did not end, nor will the current political messiness.

The New York Times reported tonight that S & P followed up on their promise to downgrade our debt from AAA to AA+ which will probably increase interests costs.

S & P seemed to make it clear earlier that such a downgrade would happen if Washington did not come up with a deficit reduction plan of 4 trillion over 10 years.

They have are playing their political divide game rather poorly for which they are overly richly compensated, except in my opinion, the President, who is underpaid relative to other CEOs regardless of how poorly the game is played.

The recurring divide is between the statists who want government to control more money and the small government proponents who want to keep more money in the hands of business and consumers and between those who despise business and those who over endow them.

So S & P had to downgrade the debt to save face, after all Washington ignored them when it somewhat over simplistically, raised the debt limit 2.1 trillion and promised to find ways to lower the debt by a similar amount. Net effect I still do now quite understand and could be overly wrong on those numbers.

It is true once again I am afraid, that we will not really know what is in the bill until it has been passed for some time and a few people read it besides the authors who never seem to speak in public.

But the downgrade was because of the political gridlock which simply could not generate action to agree to continue quietly our terrible financial habits. Over promising and over spending and under taxing during deficit periods and wars, should have caused a downgrade a long time ago.

Had the ruling cabals been a little more collegial with lower decibel invectives, no down grade would have happened, because it might not have been threatened in the first place.

We would have continued, just like now we will continue, to pay our debt with borrowed money because of bipolar policy mistakes here and abroad.

One of the biggest abroad and here is that no one could or would stop China from pegging their currency like a currency manipulator to the dollar. That had a host of benefits for them and unforetunately it meant we could import cheap goods as well as cheap money for so long that our addiction is severe.

The withdrawal will be full of all the things you may have heard is involved in alcohol withdrawal. And no matter how collegial they may occasionally become, most of us are not going to like it.