The downgrade of US debt should give hope to Filipinos in a roundabout way. When the most successful economic power of the past two centuries bites the economic dust because it bites itself in the ass, then Filipinos can look at their own political arena and say, quite accurately, our economy may be looking up from near the bottom, but "at least our leadership is not that dysfunctional."
Bankers and other lenders learn from the outset of the four "C's" that determine whether or not a loan should be made:
- Capital: is the base of wealth sound for the size of loan being considered?
- Collateral: are there hard assets to back up the loan?
- Character: is management capable of running the business and assuring payback?
- Capacity: is the company generating enough cash to pay down the debt?
S&P knocked the US down one rating for two reasons: 1) questionable capacity to pay a debt that is relentlessly increasing as a share of GDP, and 2) questionable character, in the form of acrimonious leadership that pushed the nation to the financial brink.
These are legitimate reasons for knocking down the debt. The first is analytic, factual, numerical. The second is right there in plain sight, on the television.
So how dense are American leaders? Only one has evidently gotten the point and remained publicly silent, President Obama. The day after, the rest of the bozos are out being acrimonious and proving S&P's point. (From: Associated Press)
GOP frontrunner Mitt Romney: "America's creditworthiness just became the latest casualty in President Obama's failed record of leadership."
Senate Majority Leader Harry Reid: it "reaffirms the need for a balanced approach to deficit reduction" including not just spending cuts but higher revenues from ending tax breaks for big corporations and the rich.
House Speaker John Boehner, R-Ohio: the downgrade "is the latest consequence of the out-of-control spending that has taken place in Washington for decades."
California Democratic Rep. George Miller: "reckless extortionist legislative strategy" by the GOP.
Former Minnesota Gov. Tim Pawlenty and presidential aspirant: "What we should be talking about is downgrading Barack Obama from president of the United States."
Rep. Michele Bachmann, R-Minn, presidential aspirant: called for Treasury Secretary Timothy Geithner's ouster.
Associated Press: By contrast, Obama was conspicuously silent. And administration officials who were scathing in private about the S&P move declined to be quoted on the record.
Now it may be simple luck, or it may be electoral wisdom, but the Philippine legislature and the President are pretty much in sync as to what needs to be worked on. A constitutional convention is not a priority. Passing laws that bring the nation into the modern world is: ending corruption, women's rights (HR, divorce), child abuse. Managing fiscal matters is within the hands of the President, not a bickering set of political warlords and presidential aspirants.
Oh, yes, Former President Arroyo's greedy self-dealing cronies are complaining that their pork has been delayed, so there is enough acrimony to keep the country balanced and safe from complete dominance. But at least the government is reputable, above board, earnestly working on behalf of the people.
US politicians are working for themselves.
The jackals are running wild. Baying into the wind and now caught by S&P, on camera, rolling in their own dung.