Tuesday, July 26, 2011

Obama speech written by GOP, S&P, FoxNews?

 I just watched Obama's "speech to the nation" on the debit ceiling impasse.  He said very little I had not heard him say before.

However, I was particularly disappointed by something I couldn't recall having heard Obama say before.  I tweeted my reaction:

Had I heard Obama correctly?  Reuters has posted the text of the speech and I've highlighted the part of the speech I mention in the tweet: 
Defaulting on our obligations is a reckless and irresponsible outcome to this debate. And Republican leaders say that they agree we must avoid default. But the new approach that Speaker Boehner unveiled today, which would temporarily extend the debt ceiling in exchange for spending cuts, would force us to once again face the threat of default just six months from now. In other words, it doesn't solve the problem.

First of all, a six-month extension of the debt ceiling might not be enough to avoid a credit downgrade and the higher interest rates that all Americans would have to pay as a result. We know what we have to do to reduce our deficits; there's no point in putting the economy at risk by kicking the can further down the road.
Originally, it was Republicans who came up with this argument.  The unemployed be damned, the GOP claimed that any failure to significantly reduce the federal debt in short order would lead to economic catastrophe.  According to the right-wingers, if nothing was done about the debt then so-called "bond vigilantes" would start dumping Treasury bills, wreaking havoc on the economy.  The GOP threatened only to lift the debt ceiling if the White House negotiated a deal to reduce the debt.

Obama has since taken the Republicans up on the idea of using the debt-ceiling deadline as an opportunity to negotiate major cuts to the national debt.   However, until tonight, I had never heard Obama echo the Republican assertion that America's Triple-A credit rating was at imminent risk if an agreement was not reached to slash the debt.*  The assertion struck me as spurious and corrupt when the Republicans made it, and hearing Obama say it does not make it any less so.  

In mid-April the GOP found support for its prediction from Standard & Poors.  S&P, of course, is one of the Wall Street ratings agencies that falsely accredited worthless home mortgages; it was instrumental in blowing up the economy in 2008.

Tonight we had President Barack Obama echoing a GOP talking point that was later affirmed by S&P and championed by FoxNews. Something to think about.

* The notion that the credit rating of the US is in jeopardy if the government fails to lift the debt ceiling goes without saying.  But Obama wasn't making that point in the above passage.

As I blogged the other day, I find the entire trajectory of Obama's economic policy disappointing.  

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