Is the U.S. Credit Rating a Victim of GOP Sabotage? | Daniel Gross – Yahoo! Finance
The S&P showed some inefficiencies in their analysis and ratings in the past. Now, their ratings are likely based on political actions, therefore, punishing the government with a downgrade because of a lack of ability to agree on fiscal and monetary policy.
“But Congressional Republicans deserve much more of the blame. For this calamity was entirely man-made — even intentional. The contemporary Republican Party is fixated on taxes. It possesses an iron-clad belief that the existing tax rates should never go up, that loopholes shouldn’t be closed unless they’re offset by other tax reductions, that the fact that hedge fund managers pay lower tax rates than school teachers makes complete sense, that a reversion to the tax rates of the prosperous 1990’s or 1980’s would be unacceptable.”
This just shows that the government system, with a ruling party and an opposition, makes financial decisions more difficult when individuals have different beliefs on economic policies. Is taxes are so bad, then fiscal expenditure should be increased to allow job creation and growth.