“The political process will outperform S&P’s expectations … The fact is when the issues are important, history shows that both sides can come together and get things done.”
So says White House Press Secretary Jay Carney, in response to Standard & Poor’s announcement yesterday that it has changed its outlook for US sovereign debt from stable to negative, thereby raising the odds that it will downgrade US debt within the next two years. When someone cites the lessons of history, I usually check my wallet.
While S&P’s warning could provide additional leverage for those who are serious about pursuing fiscal responsibility, one wonders: will the electoral calendar intervene? There is an interesting debate on this issue at the New York Times.
Perhaps Pileus readers would like to add their contributions here?