The American Spectator

A. Doer| 8.9.11 @ 12:05PM

try to talk sense into S&P, which has caused a market meltdown

Demand for US treasuries didn't go down. In fact, at one point after the downgrade demand for treasuries was up. And the market was down, but it was down before the downgrade too. Today so far it's up.

That being said, your three suggestions don't come close to doing what S&P says they want to see, so it's unclear why you think S&P would find it reassuring enough to consider undoing the downgrade.

They're threatening another downgrade if they don't get what they want, BTW. The Democrats won't give them half of what they want, and the Republicans won't give them the other half, so that second downgrade may be in the cards.

Incrementalism not only doesn't work for the S&P, it doesn't work politically. Take the "chained Consumer Price Index" idea. What it means in practice is that the rate of increase in entitlement payouts is reduced. Some kind of reduction in entitlements needs to happen, and maybe this is part of the solution, but the Democrats would have to be pretty stupid to agree to what amounts to an entitlement cut without getting any concessions from the Republicans.

That's the nature of gridlock. Neither side wants to solve the problem if they have to shoulder the burden of doing something that will anger their constituents and the other side doesn't.

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Mimi| 8.9.11 @ 12:33PM

I think Quin the S&P is looking for some long term changes, where the change is more lasting and permanent. The Mack Penny Plan, that cancels the 7.5-8%yearly budget increases and lowers and cuts 1cent from every federal dollar may do the trick...in fact ...I thought Boehner would have included it in the deal with democrats last week...if it was , we wouldn't be in the trouble we are in today.
Another plan would just go back to 2006 yearly budget....for some time.
When the Republicans win another election , Things will dramaticly improve, the economy will heal almost on it's own as uncertainty ends!
If the Democratic Party wants to help....they will have Obama resign....at least that will give them a chance to survive....they will, and rightly deserve to be called the PARTY who gave the U.S.A. it's first Downgrade in credit rating in our esteemed HISTORY!

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A. Doer| 8.9.11 @ 1:00PM

The Mack Penny Plan works plenty well without the penny cut, because cutting the increases does the real work. The "one penny" thing is just a gimmick.

The problem is that not only are costs increasing due to inflation, more people are reaching retirement age than are dying so the number of beneficiaries also goes up. Cutting the increases would mean some heavy cuts to social security for people who have already retired or are near retirement.

Those things would be so unpopular that Republicans may talk about them when there's no danger of it actually becoming law, but it's all talk. Even the Ryan plan doesn't come close to making cuts that severe.

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Oldefarte| 8.9.11 @ 4:28PM

Teh STEP that I'm most interested in will occur in November of next year, when we voters can hopefully pruge this government of its domestic terrorists who are now in charge!!!!

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