Translating Standard & Poor’s

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A few days ago, Standard & Poor’s announced that even if Congress passes a debt ceiling increase, they might still downgrade U.S. debt if there’s not also an agreement to cut the long-term deficit by at least $4 trillion. Now, there are all sorts of reasons why no one should care much what S&P thinks. For example, there’s the fact that they don’t know anything more about U.S. solvency than anyone else. There’s the fact that they displayed monumentally bad judgment during the housing bubble. And as Mike Konczal pointed out earlier today, there’s the fact that they routinely do a lousy job of rating sovereign debt.

But there’s another interesting aspect of the whole thing. Here is S&P’s explanation for why they’re so concerned:

U.S. political debate is currently more focused on the need for medium-term fiscal consolidation than it has been for a decade. Based on this, we believe that an inability to reach an agreement now could indicate that an agreement will not be reached for several more years. We view an inability to timely agree and credibly implement medium-term fiscal consolidation policy as inconsistent with a ‘AAA’ sovereign rating, given the expected government debt trajectory noted above.

Did you see the card they palmed via use of the passive voice? Here’s the translation: If Congress had just gone through its usual kabuki and then raised the debt ceiling, S&P wouldn’t have cared. Life would go on as usual. But because “U.S. political debate” is currently so focused on the deficit, that makes addressing the deficit suddenly important regardless of what action is taken on the debt ceiling.

But this focus on the deficit didn’t spring fully formed out of Zeus’s forehead. It’s the product of a deliberate political offensive by one of America’s two major parties. (The other major party is more focused on addressing sky-high unemployment and poor economic growth.) So what S&P is saying here is this: If Republicans unilaterally decide to focus on something for partisan reasons, then the nation had better address it. And if the nation doesn’t address Republican concerns, then its credit rating will go down.

Nice.

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We didn't know what to expect when we told you we needed to raise $400,000 before our fiscal year closed on June 30, and we're thrilled to report that our incredible community of readers contributed some $415,000 to help us keep charging as hard as we can during this crazy year.

You just sent an incredible message: that quality journalism doesn't have to answer to advertisers, billionaires, or hedge funds; that newsrooms can eke out an existence thanks primarily to the generosity of its readers. That's so powerful. Especially during what's been called a "media extinction event" when those looking to make a profit from the news pull back, the Mother Jones community steps in.

The months and years ahead won't be easy. Far from it. But there's no one we'd rather face the big challenges with than you, our committed and passionate readers, and our team of fearless reporters who show up every day.

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