August 6, 2011
DAVID FREDDOSO: Downgrade Shows DeMint Was Right.
The bond-rating houses kept saying all along that they weren’t worried about the debt ceiling not being increased. Rather, they were worried about the long-term prospects of the U.S. government paying back $15-plus trillion, which is where our national debt (both publicly held and obligated to trust funds) will be shortly.
Because last weekend’s deal didn’t cut spending deeply enough, S&P has just downgraded us. We’ll see just how disastrous this becomes — some are arguing it’s not such a big deal — but consider this the market’s revenge for TARP and the stimulus package. You run up the debt, Mr. President, you lose your good credit.