This is a terrible day. For the first time, the creditworthiness of the United States has been called into question by an independent entity, Standard and Poor’s, which has downgraded the country’s credit rating from AAA to AA+. Its statement features this terrifying phrase: “The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed.” S&P assigns blame to all players, and by seeing a “negative outlook” down the road, is saying it expects to downgrade to a simple AA within two years.
The Left will and is already blaming the Tea Party and Republicans. The Right will and is blaming the growth of the federal debt and the refusal to deal with the unsustainable path created by the entitlement programs. This is a grinding battle that will lead to an intellectual and ideological stalemate. There’s truth to the Leftist charge that the conservative Republican decision to use the debt ceiling fight as leverage to force a cut in the national debt at a particularly risky time was unsound. But that is nothing next to the liberal fantasy that the U.S. can stay on its current course—the most destructive notion in present-day politics.
But the ideological stalemate does not mean the political fallout will be evenly distributed. This is a colossal disaster for Barack Obama, and anybody who says otherwise is kidding himself or trying to spin you. We know that the election of 2012 is going to be fought on jobs, the economy, and the wisdom of health care. But now the GOP has an overarching theme that I predict will be at the core of a $500 million advertising campaign: “America needs its good name back.”