Maddow: If We Take S&P at Their Word, the Downgrade Was Due to Republican Brinkmanship on Debt Ceiling
Click here to view this media Well, we had one bright spot on the Sunday morning talks shows this weekend — the fact that Rachel Maddow was a panel member on Meet the Press. The downside, she got stuck debating Republican hack Alex Castellanos who just regurgitated one Republican lie filled talking point after another during the entire panel segment. When responding to whether his buddy Mitt Romney should have shown some leadership and weighed in on the debt ceiling debacle before it was over with or not, Castellanos tried blaming the downgrade by S&P on government spending and too much debt and Maddow corrected him about just who exactly they blamed if you actually read their report — Republicans playing chicken with the debt ceiling and their rigid refusal to ever allow taxes to be raised. MADDOW: To the extent that we are taking the S&P downgrade as a serious thing, that we believe that S&P has the credibility to have done this, and this actually does levy a blow against the U.S. economic credibility. I mean, honestly, we should talk about the fact that during the financial crisis, S&P was handing out AAA ratings to any pile of junk tall enough to reach the doorbell and ask. So they do not have the most credibility on this. But if we are going to take them seriously, let’s take them on their word about why they did this. They said they did this because of brinksmanship over the debt ceiling. They did not say they did this because there’s too much government spending. GREGORY: All right. Let’s, let… MADDOW: They said they did this because of Republicans holding the debt… CASTELLANOS: Because of the debt. MADDOW: No. The debt ceiling. Brinksmanship… CASTELLANOS: Yeah, but the debt ceiling is the ceiling… MADDOW: …is their word. Naturally Castellanos did his best to interrupt her so she couldn’t make her point. Austan Goolsbee got a chance to follow up and agree with Maddow on the fact that Republicans were the ones out there actually insane enough to be pretending that default might be acceptable. Steve Benen made some similar points in his post from today A pox on one house : But for all the complaining I do about this, it’s only fair to note when someone gets this right. National Journal ’s Edmund Andrews, for example, had a good piece yesterday that specifically rejected the notion that the downgrade is “a pox-on-both-your-houses curse at the intransigence of both Republicans and Democrats.” And who instigated this brinksmanship, refused to compromise, and delayed a resolution until literally the last day? Putting aside, at least for now, whether S&P has the credibility to make such sweeping condemnations, it’s worth emphasizing the extent to which the agency pointed the finger at congressional Republicans. It not only directly attributed blame to the GOP hostage strategy of the past few months, it lamented the very idea of allowing “the statutory debt ceiling and the threat of default” to “become political bargaining chips in the debate over fiscal policy,” before complaining that “the majority of Republicans in Congress continue to resist any measure that would raise revenues.” Andrews added, “[I]t’s hard to read the S&P analysis as anything other than a blast at Republicans.” Full transcript below the fold. GREGORY: But, but the–who’s the front-runner right now? Mitt Romney, a man you advised, who couldn’t have been farther away from what happened in Congress over this debt ceiling debate, and then at the end he says, “By the way, I’m against the deal.” Is that big leadership? CASTELLANOS: I think riding, you know, it’s like being a newspaper editor, riding out of the hills down to the battlefield after the battle’s over and shooting the wounded. I don’t think that’s particularly productive. But I think something Mr. Greenspan says is important and that is that this is not going to be without pain. There’s a reason alcohol, drugs, and promiscuous government spending are all addictive. They feel good at first. When you stop doing them, it’s going to feel less good. GREGORY: Right. CASTELLANOS: Republicans out there politically are saying, “Take the pain now. Don’t pass it on to the next generation.” That’s why they’re being so firm. GREGORY: I suspect you disagree with it, that that’s their view. MADDOW: To the extent that we are taking the S&P downgrade as a serious thing, that we believe that S&P has the credibility to have done this, and this actually does levy a blow against the U.S. economic credibility. I mean, honestly, we should talk about the fact that during the financial crisis, S&P was handing out AAA ratings to any pile of junk tall enough to reach the doorbell and ask. So they do not have the most credibility on this. But if we are going to take them seriously, let’s take them on their word about why they did this. They said they did this because of brinksmanship over the debt ceiling. They did not say they did this because there’s too much government spending. GREGORY: All right. Let’s, let… MADDOW: They said they did this because of Republicans holding the debt… CASTELLANOS: Because of the debt. MADDOW: No. The debt ceiling. Brinksmanship… CASTELLANOS: Yeah, but the debt ceiling is the ceiling… MADDOW: …is their word. GREGORY: Right. CASTELLANOS: What is the debt ceiling… GOOLSBEE: What is a rating? A rating is simply an estimate of the probability of default. GREENSPAN: That is true. GOOLSBEE: The probability of default on Treasury is zero. It’s the safest asset in the world by far. But we’ve just gone through an experience that anybody looking at it has to say, “Whoa, maybe somebody might actually default in the future,” if we were going to go to the edge of, of insanity. MGREGORY: Right. Let’s… MADDOW: That’s right. GREGORY: Let me get in here. I want to take a break.
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on August 7, 2011. Filed under