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Despite debt-ceiling agreement, GOP hostage-taking could still lead to U.S. credit downgrade [1]
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Date: 2023-06-03
Now that Republicans have finished (for the time being, anyway) threatening people’s Social Security checks with their irresponsible economic brinkmanship, they can go back to harassing elderly people in all the usual ways—like convincing them that caravans of rampaging immigrants are at Kroger as we speak bogarting all the Weetabix and vindictively licking every individual grape in the produce aisle.
The whole world is breathing a sigh of relief after Republicans released their hostage mostly intact, but that doesn’t mean we’ve escaped unscathed. Every time this happens—which, to be clear, is only when Republicans control part of Congress and Democrats hold the White House—the markets writhe about like Donald Trump trying to chew his own arm off after getting it stuck in another jumbo tube of Pringles. Not only that, this latest debt-ceiling standoff could have lingering effects that undermine our economy for years.
On Friday, Fitch Ratings announced that it still might downgrade our nation’s credit rating, despite the 11th hour debt ceiling agreement that—for the moment—has forestalled a potentially ruinous default. In short, Fitch stated that the “repeated political standoffs” (aka reckless GOP hostage-taking) that occur whenever Republicans feel compelled to burnish their a-hole bona fides have damaged “confidence in governance on fiscal and debt matters.”
Politico:
Treasury securities are the lifeblood of financial markets and a benchmark for how everything from municipal debt to credit card rates are priced. A downgrade, which would mark only the second time a ratings service has knocked U.S. bonds from top-tier status, could drive up borrowing costs for consumers, businesses and governments — tightening credit conditions at a time when the economy is already at risk of recession. That would make for tough political headwinds for Biden, House Speaker Kevin McCarthy and other 2024 incumbents who waited until the U.S. was days away from default before agreeing to a deal. A similar dynamic influenced S&P’s decision to downgrade the U.S. credit rating in 2011 even after President Barack Obama and Republican leaders averted a debt-limit disaster.
Oh, hey, way to both-sides economic terrorism, Politico! President Biden waited too long to save the economy from Evil Opie and his henchmen. Right. Guess he should have agreed to shiv Grandma from the outset and maybe shove Jimmy Carter out to sea on an ice floe as a good-faith gesture. Again, this keeps happening only because one political party is callous and reckless enough to endanger the global economy in exchange for the right to torment poor people. But it’s nice to see we’re normalizing disingenuous financial fuckery now.
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