Rand Paul’s analogy for S&P downgrade misses the mark
Since S&P downgraded the U.S. credit rating from AAA to AA+, many conservatives have outspokenly blamed Democrats and President Obama for the decision. Senator Rand Paul (R-KY) said, “But blaming the Tea Party is sort of like blaming the fireman when he comes to put out the fire.”1 On the surface, this sounds great and I’m sure many people buy into this argument, but in reality, the Tea Party showed up to the site of the fire, only to watch the house burn to the ground.
If Paul is merely referring to the $14 trillion debt and $1.4 trillion deficit, he is correct. While the Tea Party is not wholly responsible for the deficit, irresponsible decisions made by both parties over the past few decades pushed the deficit to a level that brought about this debate. Furthermore, the two unfunded wars and tax cuts implemented by the Bush administration, which some Democrats supported, have been shown to comprise about half of future deficits. In the end, both parties are to blame for the present fiscal situation, but not equally.
Here is the kicker, and perhaps the most important piece of information in distributing blame in the debt debacle. First, there is a fundamental difference between being blamed for the debt and deficit, and being blamed for the credit rating downgrade. If Speaker John Boehner was able to convince members of his party in the House of Representatives to sign on to President Obama’s plan for a “grand bargain,” the entire debt downgrade could have been averted. Democrats had already conceded to Republicans on almost every point, yet a minority of Republicans resisted compromise until August 2, which was simply too late.
A recent Politico article by Josh Boak featured comments from an S&P official that echoed this very sentiment:
Without specifically mentioning Republicans, S&P senior director Joydeep Mukherji said the stability and effectiveness of American political institutions were undermined by the fact that “people in the political arena were even talking about a potential default,” Mukherji said.
“That a country even has such voices, albeit a minority, is something notable,” he added. “This kind of rhetoric is not common amongst AAA sovereigns.”
In the end, the S&P downgrade from AAA to AA+ was entirely avoidable.