My view of the S&P downgrade

I think the downgrade was a much needed reality check. Mainstream politicians in the biggest debtor nation the world has ever seen were talking openly of defaulting on their debt - half of which is held by foreigners and a big chunk of the remainder is openly monetized by a central bank that has long shed any semblance of independence. And then after the whole dog and pony show, the final bill that was signed was not even close to a feasible solution. $1.2T in *unidentified* cuts over several years when the annual deficit is $1T+, and, on top of that, with zero cuts in entitlements and no tax increases. What a joke. Just based on that, I think the downgrade should have been several notches and not just one...


That doesn't mean that I admire the S&P -- they, like Moody's, are a corrupt and incompetent organization and shouldn't exist. Indeed the whole NRSRO system needs to be scrapped.