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PrintApril 20, 2011
German press reacts to the Standard & Poor's downgrade
Standard and Poor's downgrades its outlook on America's AAA debt rating from stable to negative. The President continues his demagoguery against the Republicans and continues to beat the drum of class warfare. The Democrats in the Senate are content to thwart any meaningful spending reductions. With as a backdrop what is being said overseas about the ongoing Washington Follies?
Germany is the dominant economic power in Europe and is what is keeping the Euro zone from complete collapse, considering the never-ending saga of Greek insolvency, Irish and Portuguese bailouts as well a nearly inevitable rescue of Spain. The Germans, of all political stripes have begun to openly express their concerns over the actions of the Obama administration and the Democrats. What is surprising is the commentary of left-wing publications.
The center-left daily Frankfurter Allgemeine Zeitung wrote:
The reason for the Standard and Poor's change to America's rating outlook is not new financial data. Rather it is the political danger that the Democrats and the Republicans will only agree on a debt-reduction strategy after the 2012 presidential election.The primary reason for America's political stalemate is Obama's refusal to see that, in an aging society, social spending cannot be as generous as it has been in the past. The great social reformer Obama is at least 20 years too late with his ideas. And given the irreconcilability of the two parties, it isn't possible that a plan to reduce national debt will take shape within the next two years. Obama only heated up the campaign atmosphere with his budget speech last week. Indeed, the top rating for US bonds is in danger. [Emphasis added]
Another center-left publication Suddeutsche Zetung writes:
Indeed, one wonders why S&P, and its two competitors Moody's and Fitch, hasn't long stripped the US of its AAA rating. The step by S&P is a positive signal, because it counters the accusations that US ratings agencies are more critical of European debtors than they are of American ones.
The left-wing Der Spiegel adds:
A report issued by the International Monetary Fund last week suggests that the US national debt could reach 100% of gross domestic product by 2014. There is little indication that the upward trend will be reversed anytime soon. And concerns about US debt are clearly growing.While few would argue that the 100 percent figure is anything more than symbolic, US national debt is indeed astronomical, its debt-to-GDP ratio is, in fact, higher than Ireland and Portugal's both of which have asked for immediate aid packages from the Euro zone.Still recent history has shown, that when it comes to winning back a rating of "stable" [from Standard and Poor's] radical spending cuts are necessary. Standard and Poor's think it is a road that Washington is not interested in traveling. [Emphasis added]
It is not a coincidence that the Standard and Poor's action and the commentary by German publications that would normally be in league with President Obama came out after one of the most hyper-partisan, mendacious and deceitful speeches made by any President in recent memory. Obama's address on the 13th of April on an extraordinarily important matter, the US budget and debt crisis, revealed that he and his fellow travelers in the Democratic Party have no interest in solving these crucial problems, instead there is a re-election campaign to run and the country and the world be damned.
America's major creditor, the Chinese, whose foreign ministry in a very cryptic statement said: " We hope the US government will take responsible policies and measures to protect to safeguard foreign investors' interest." China holds over $1.2 Trillion dollars in US treasuries.
The world has fully awakened to the disaster that is Barack Obama; when will the rest of America?
