Here’s a letter to the Washington Post:
Eugene Robinson blames the S&P’s downgrading of Uncle Sam’s credit on the protracted refusal (until the very end) by Uncle Sam – a licentious borrower – to borrow even more (“A downgrade’s GOP fingerprints ,” August 9). Mr. Robinson scolds, “If you threaten not to pay your bills, people will – and should – take you seriously.”
Why is the first remotely serious effort in ages to oblige government not to borrow beyond a certain limit portrayed as fiscal imprudence?
Asked differently, why would creditors be spooked by a debtor’s ‘threat’ to honor his vow to keep his debt from growing? Creditors, it seems, would applaud the keeping of such a vow.
The downgrade is far more plausibly a consequence of Uncle Sam breaking that vow – and doing so in a way that reveals his cowardly refusal, at the end of the day, to address his addiction to spending greater and greater sums of money now and passing the bills on to taxpayers later.
Donald J. Boudreaux