Standard & Poor's said "there is no sure thing". They're right; time we realized that. It isn't a given that the USA or any other country, business, and person will be able to pay back their debts. It isn't a given that the US economy will "recover" to bubble opulence, that the unemployment rate will go down, or that the US economy will remain the most powerful in the world. No point in shooting the messenger – especially the messenger with such an obvious message. Much better to get back to work, reduce (preferably eliminate) the deficit, and rebuild the economy – which will NOT be accomplished just by reducing the deficit.
Sure, S&P got religion late. They should've been much more skeptical of Lehman Brother et al; their $2 trillion math error wasn't impressive. However, their downgrade has – at least in the short term – resulted in a flight TO US Treasury notes and even ten year bonds. The US is not an obscure (or opaque) company that no one can evaluate without the help of S&P; our budget numbers are well-known. We are much better positioned than Europe. We are beginning to recognize our problems. We can overcome our problems; but it's not a sure thing. Time we recognized that. The calls to muzzle or punish the rating agencies are scarier than any downgrade could possibly be.
The Tea Party is like the kid who kept rudely saying that the emperor was naked. Mainstream politicians from both parties clucked about deficits and voted for more and more unfunded (and unfundable) programs and pork. Congress hasn't even bothered to pass a budget for the last couple of years; yet critics of the Tea Party said it was "inappropriate" to discuss budget levels while voting on the level of debt. Gimmee a break. You want to raise the credit limit and you don't want to talk about the gap between income and expenditures? Try that at the bank.
I think the Tea Party did go one bridge too far. It sounds like the plan Boehner and Obama were working on was better than what we got in the end. That may be an illusion; the plan might as easily have been torpedoed from the left as the right. But it would've nice to see that played out. There is a danger that Tea Party congresspeople have misinterpreted the anger that bought them to Washington. The original litmus test which most Tea Party groups used to decide which Republicans to oppose in primaries was a vote for TARP – the bailout of banks. The beneficiaries of government spending very much include business. Special provisions in the tax code – whether for oil, hedge fund managers, or "green" technology – are every bit as much expenditures as a welfare check; and, unlike welfare, never justified. It was absurd for those tax breaks not to be on the table.
Anyway, now that we've had our slap in the face and our wakeup call, it's time to build the future we want. We can do that.
For a start: Read Andy Kessler's Five Ideas to Kick-Start Job Creation: Entrepreneurs don't want government money. They want the chance to invest their sweat equity.