Stephen Gandel, a senior writer at TIME(°æÁ¦ºÎ); ¡°The ratings agency¡¯s decision on Friday to downgrade the credit rating of the U.S. government to AA+ from AAA – stripping the U.S. of the highest rating for the first time in 70 years – was 100% correct,¡± he writes. In Gandel¡¯s estimation, economic factors such as slowing growth, higher household debt and other social trends justify the rating change." ¡°The fracturing of our political system has led to the rise of political parties that are unwilling to compromise on our biggest challenges. It is clear that the rise of the Tea Party and the pledge of Republicans in general to never raise taxes, along with the Democrats unwillingness to cut Social Security, produced the downgrade.¡±
Adam Sorensen, an associate editor at Time.com(Á¤Ä¡ºÎ): "Gandel is basically saying that in the current political environment, tax increases are impossible for the foreseeable future. One gaping hole in this theory is that under current law, tax rates will revert to near Clinton-era levels if no extension of the Bush cuts is passed. Now, while that¡¯s not likely, all it will take is for one Democratic President (probably in his second term) to use his veto pen sometime down the road and the Bush tax cuts will be no more." "It¡¯s true that Democrats don¡¯t want to cut Social Security. But Social Security is not a significant driver of long-term deficits! The Congresisonal Budget Office does project a considerable gap between revenue and outlays in the next several decades but this is a simple balance sheet issue. Social Security ran a surplus until very recently; small tweaks to one side of the equation or the other can correct the imbalance, and the current surplus gives us some time to right the ship. It should also be noted that Democrats have nonetheless flirted with Social Security changes several times in recent months."