Fallows has a good roundup of rational response to S&P's ludicrous downgrading of the USA's debt rating. What stands out to me is the idea that we should worry about their competence, especially after their supposed failure in the mortgage crisis.
Dave Lindorff calls this one correctly:
Either S&P has been pressured by powerful Republicans and/or Wall Street Bankers to issue this warning, in order to add to national hysteria about the national debt and win more drastic cuts in social programs, or S&P is simply blowing it again.
Except that I don't believe that S&P 'blew it" in the first place. They knew what they were doing, and their actions succeeded quite well, perhaps even better than they were expecting. While it's always risky to bet against incompetence, it just seems more likely to me that S&P continued to give A ratings to junk mortgage securities because it was profitable to do so, Further, they - that is, not just S&P but AIG, Goldman Sachs and the rest - knew that they could run things into the ground and get bailed out. It had happened before, and happens fairly regularly with things like the airline industry.
The people making these ratings know that they won't be held personally responsible, and further, that they will be able to make money during and after whatever crisis they create.
The debt ceiling will be raised. The GOP has been given its marching orders by their corporate masters, and there simply aren't enough teabagging terrorists in the House to stop it. What's happening now is just laying the groundwork for the negotiations, setting a stage of panic and confusion so that American businesses, especially the banksters, will get even more control of our economy and less oversight in exchange for doing what they have clearly already decided to do.
