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Patrick Buchanan
Pat Buchanan
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Who's Really Downgrading America?


The decision by Standard & Poor's to strip the United States of its AAA credit rating, for the first time, has triggered a barrage of catcalls against the umpire from the press box and Obamaites.

S&P, we are reminded, was giving A ratings to banks like Lehman Brothers, whose books were stuffed with suspect subprime paper, right up to the day Lehman Brothers fell over dead.

Moreover, S&P made a $2 trillion error in its assessment of U.S. debt and used political criteria in making its downgrade.

All of which may be true. But none of which is relevant.

This downgrade is deeply deserved. For no one really believes the United States is going to pay its creditors back the $14 trillion it owes them, or the $21 trillion it will owe them at decade's end, with dollars of the same value as those that the United States is borrowing today.

In the last year alone, the U.S. dollar has lost 30 percent of its value against the Swiss franc.

A Swiss citizen who exchanged francs for $100,000 in dollars in June 2010 to buy one-year T-bills, then cashed those T-bills in this June, would have gotten back $100,000 in U.S. dollars. But those dollars would now be worth 30 percent less in Swiss francs.

On "Meet the Press," Alan Greenspan insisted that the United States is not going to default. Why not? Because our debt is denominated in dollars, and we can print dollars to pay off our creditors. Which is pretty much what Chairman Ben Bernanke and the Fed have been doing.

With the dollar down 5 to 10 percent this year alone against the world's more respected currencies, we are engaged in what the Romans called coin-clipping — official stealing from citizens and foreigners.

Why are the Chinese so upset?

Because they are sitting on more than $1 trillion in U.S. bonds and Treasury bills bought with dollars we paid them for Chinese-made goods, while the purchasing power of the dollars that those bonds and T-bills represent withers away every week.

"I believe this is, without question, the 'Tea Party downgrade,'" says Sen. John Kerry.

How so? Because the Tea Party blocked the big deal President Obama sought to cut with House Speaker John Boehner to resolve the deficit-debt crisis.

The president, we are told, was prepared to accept $3 trillion in reduced future spending for entitlements like Social Security, Medicare and Medicaid, but the Tea Party caucus refused to let Boehner agree even to $1 trillion in "revenue enhancement."

But here, a question arises: If the president believes entitlement reform is essential to get America's deficit-debt crisis under control, why does he need Tea Party cover to do his duty?

He doesn't.

Tea Party intransigence on taxes is not the reason for Obama's failure to cut spending. It is his excuse.

Indeed, if Obama announced tomorrow that he was going to cut future spending on entitlements by $3 trillion to restore our AAA credit rating, he would have the full support of the Tea Party.

His opposition would come from Kerry's colleagues in the Senate and Nancy Pelosi's in the House.

To see how absurd it is to blame Tea Party Republicans for the downgrading of America's debt, imagine this scenario: Rep. Ron Paul is speaker of the House, Sen. Rand Paul is majority leader, and Rep. Paul Ryan is president of the United States.

Does anyone doubt this trio would restore the U.S credit rating in a New York minute? Every sacred cow in the federal pasture, from food stamps to foreign aid, would be hanging in the meat locker.

The American people have come to like the president, but a majority is coming to believe he is simply not the decisive president we need to lead us out of the morass in which he found the country and from which he has failed to extricate us.

"He made it worse!" is shaping up as the GOP slogan for 2012.

If Obama wishes to restore the AAA rating of his country, he might consider two separate and bold steps, both consistent with his professed beliefs.

First, tell the Republicans that if they will not agree to revenue enhancement, he will nonetheless do his duty and pare back spending in the entitlement programs. He would get instant GOP support.

Following this, he could go to the Republicans and tell them that if they agree to eliminate the clutter in the tax code — exemptions, loopholes, deductions — he will agree to cut tax rates for individuals and corporations alike, to make America more competitive.

Again, he would have the support of Republicans and the Tea Party. It might even advance his re-election prospects, if he could get renominated by his own party, which would rebel at both reforms because they would mean a suspension of the politics of tax and spend.

As for the S&P downgrade, again, the only surprise is it didn't come sooner.

To find out more about Patrick Buchanan, and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at



3 Comments | Post Comment
I loved the pictures on TV last week of the presidents when they took office compared to the pictures after a few years. The experienced presidents looked haggard. I suspect that shortly after a president is elected, he is given a file entitled: what's really going on. For example, in the lobby of the CIA building there is a wall commemorating great CIA agents. Each great agent has a star on the wall. On a table, a book lists the names associated with the stars. Very tasteful. However, five stars have no name written there because it would be too shocking for the public to know about these five. The question long ago was whether or not the United States would tie its economy to the world economy. Orientals living in bamboo huts or Arabs not capable of sewing a baseball cap together. What should we think about them? How should we approach them? That was the question.
I meet good young people raised on television's disjointed messages. People often speak about issues in a way that suggests the viewers can end up like the psychopath in Norway who was able to speak about issues but had no actual education to know what he was talking about. And the universities have failed since the 1990s so they no longer produce educated citizens capable of talking about issues. The statistic we need to know is the number of working citizens "in the black." This statistic cannot be falsified by allowing workers to have some secret hoarded amount (a retirement fund) while using their paychecks to make ends meet. For examplle, a Tea Party person who successfully hoarded $500,000 over a twenty year period might say, "Yeah, but I'm not counting that fund in my calcualtions. I don't get that for ten years."
Nevertheless, I believe we should be flexible. We get into trouble when we are rigid and cannot think. Was the war in Iraq wrong? Of course not. You hijack planes and crash them into buildings, we are coming out and kicking someone's ass. Iraq, close enough. Spread the word. But should it have kept going ten years? No. Global economy? Ok, we did it. Now a little Trump might go a long way. I was shocked in December 1999 when I heard him speak at a Tony Robbins event and say he would run for President. (People are actually carrying Jesse Ventura books around.) However, after watching The Apprentice during its first three seasons, I saw that Trump actually was pretty decent. However, when he again mentioned president a couple of years ago, right after that, he was all over the news talking crazy about various issues, including President Obama's birth certificate. Trump should have made sure someone was not spiking his Yoohoo with LSD. If we were flexible, we could pull back for a time and tell the world. "Look, in the jargon of the Baby Boomer's, supporting you all for sixty years has been real, but we are going to go inside and manage our own house for a while. Talk to you later."
Comment: #1
Posted by: Mike Hayne
Tue Aug 9, 2011 8:55 AM
Pat, the assumption that lower taxes for the already rich stimulates the economy is not verified. The tax savings may be used to buy existing businesses creating no new jobs or the funds may be invested in China. govt funds go directly into the economy buying products or services . In addition most govt workers probably spend 95% of their wages . The rich may put funds into the wall Street casino producing nothing of substance.
Comment: #2
Posted by: Daniel Johnson
Wed Aug 10, 2011 11:13 AM

BROTHER PAT speaks the truth

All Americans of voting age should read

'How the Economy Was Lost' By Paul Craig Roberts

nuff said
Comment: #3
Posted by: Soothsayer
Wed Aug 10, 2011 11:21 AM
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