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http://rt.com/news/tea-party-us-default/The loss of America's triple-A credit score has sparked panic sell-offs on global markets. But Steven Leser, a blogger with the International Business Times and member of Democrats for Progress, believes that S&P have acted responsibly.
“It is not a very popular position and I don’t like the after-effects of if, but let’s face it, Standard & Poor’s has one responsibility,” he said. “Their responsibility is to investors who rely on their ratings to determine what the risks are in any given institution."
“And here in the US we have a faction of the US government, specifically the Tea Party Republicans, who are willing to cause a default if they don’t get their ideological demands met," he continued. "And that being the case, S&P has to go back to their investors and say ‘listen, the United State is not quite as safe an investment as it was anymore, there might be a default because of these Tea Party Republicans.’”
Even China has called the way the US has been handling debt crisis 'highly irresponsible'. And Steven Leser believes that putting party interests first in such a serious situation was a very juvenile way for the Republicans to behave.
“One of the interesting things coming out of the whole debt-ceiling debate was most of the debate was actually happening within the Republican Party,” he said. “All of the question marks are within the Republican Party: who is really in charge there? Is some sort of order going to be re-established?"
“Are the folks who fund the Republican Party, who have a lot of holdings, who have a lot to lose in terms of the market and stocks if things go south, are they going to say ‘listen, if you let these folks hijack the discussion again, if you let them take us in the direction of a default, we are not going to give you any money in the 2012 elections.’”
Steven Leser believes the US economy as a whole is still strong and it is the “perception issue” which makes things look so bad.
“In terms of economic institutions, so much of it relies upon perception,” he said. “Even a rather healthy bank for instance, if all of a sudden the public loses confidence, if there’s an inaccurate report about a bank and the public decides to have a run on that bank, that bank will fail even if it is otherwise healthy.”
Steven Leser says that the crisis can be brought under control pretty quickly if all Republicans come with a cohesive plan instead of giving the perception that the government is willing to default.
“That is what is really needed here to restore order and I’m sort of looking to see if the more mainstream wing of the Republican Party starts trying to reassert itself going forward,” he said. “It will be interesting to see if they are going to do that though. Because I think that the Republicans are hesitant to bring the Tea Party under control, because that’s where the energy is in the Republican Party.”
“I don’t know if the Republicans can do it,” he concluded. “But if they don’t, this economy is in for a really bumpy ride.”
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