海角大神

The Standard & Poor鈥檚 downgrade of America鈥檚 debt couldn鈥檛 come at a worse time. The result is likely to be higher borrowing costs for the government at all levels, and higher interest on your variable-rate mortgage, your auto loan, your credit card loans, and every other penny you borrow.

Why did S&P do it?

Not because America failed to pay its creditors on time. As you may have noticed, we avoided a default.

And not because we might fail to pay our bills at the end of 2012 if tea-party Republicans again hold the nation hostage when their votes will next be needed to raise the debt ceiling. This is a legitimate worry and might have been grounds for a downgrade, but it鈥檚 not S&P鈥檚 rationale.

S&P has downgraded the US because it doesn鈥檛 think we鈥檙e on track to reduce the nation鈥檚 debt enough to satisfy S&P 鈥� and we鈥檙e not doing it in a way S&P prefers.

Who gave S&P authority to tell US how to shed debt?

Here鈥檚 what S&P said: 鈥淭he downgrade reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government鈥檚 medium-term debt dynamics.鈥� S&P also blames what it considers to be weakened 鈥渆ffectiveness, stability, and predictability鈥� of US policymaking and political institutions.

Pardon me for asking, but who gave Standard & Poor鈥檚 the authority to tell America how much debt it has to shed, and how?

If we pay our bills, we鈥檙e a good credit risk. If we don鈥檛, or aren鈥檛 likely to, we鈥檙e a bad credit risk. When, how, and by how much we bring down the long-term debt 鈥� or, more accurately, the ratio of debt to GDP 鈥� is none of S&P鈥檚 business.

The irony: S&P is partly to blame for America's current state

S&P鈥檚 intrusion into American politics is also ironic because, as I pointed out recently, much of our current debt is directly or indirectly due to S&P鈥檚 failures (along with the failures of the two other major credit-rating agencies (Fitch and Moody鈥檚) to do their jobs before the financial meltdown. Until the eve of the collapse, S&P gave triple-A ratings to some of the Street鈥檚 riskiest packages of mortgage-backed securities and collateralized debt obligations.

Had S&P done its job and warned investors how much risk Wall Street was taking on, the housing and debt bubbles wouldn鈥檛 have become so large 鈥� and their bursts wouldn鈥檛 have brought down much of the economy.

You and I and other taxpayers wouldn鈥檛 have had to bail out Wall Street; millions of Americans would now be working instead of collecting unemployment insurance; the government wouldn鈥檛 have had to inject the economy with a massive stimulus to save millions of other jobs; and far more tax revenue would now be pouring into the Treasury from individuals and businesses doing better than they are now.

In other words, had Standard & Poor鈥檚 done its job over the last decade, today鈥檚 budget deficit would be far smaller and the nation鈥檚 future debt wouldn鈥檛 look so menacing.

We鈥檇 all be better off had S&P done the job it was supposed to do, then. We鈥檝e paid a hefty price for its nonfeasance.

A pity S&P is not even doing its job now. We鈥檒l be paying another hefty price for its malfeasance today.

Robert B. Reich is the former US Secretary of Labor听and is the author of "Aftershock: The Next Economy and America鈥檚 Future." This post originally appeared at .

漏 2011 Global Viewpoint Network/Tribune Media Services. Hosted online by 海角大神.