It is worth noting that when Standard and Poor issued its warning about American debt it did not mention the debt ceiling debate.
In fact, Barclay's Bank specifically noted in its statement about what it all meant that "This announcement was not about the debt ceiling; in fact, the debt ceiling is not even mentioned in the S&P release. In sharp contrast, the reason why U.S. government ratings came under pressure in 1995-96 (Moody’s put parts of U.S. government debt on negative watch) was the debt ceiling impasse at that point. This means that even if the debt ceiling debate were to be resolved in the near term, it would not be enough to restore the outlook to stable."
Certainly, if things were dragged out long term there would be an impact, but not over the short term. As Senator Pat Toomey and others have noted, the United States brings in more money each month than is owed on the interest payments we must make to service our debt.
That has not, however, stopped the Democrats from trying to claim the S&P decision is about the debt ceiling.
Witness Democrat Party mouthpiece subsidized by the Washington Post Ezra Klein spinning the S&P madly into a demand that we raise the debt ceiling and screw the cuts.
This is going to be the Democrats' new tactic. Back in 2006, Barack Obama, in opposition to the debt ceiling increase at that time, said, "Increasing America’s debt weakens us domestically and internationally."
Harry Reid joined him, saying, "Given the explosion of debt in recent years, it is long past time for Washington to change the course and adopt a new fiscal policy." The Democrats have adopted a new fiscal policy and it has exploded the debt. Despite Democrat rhetoric about George W. Bush's out of control spending, the Democrats these last two years have made George Bush's spending spree look amateurish.
Now the Democrats want to increase the limit on the national credit card instead of paying down the bill. They want a free pass to more spending. Instead, the Republicans should accept the fact that no matter what they do they will never win over the press and should instead refuse to raise the debt ceiling without massive cuts and entitlement reforms.
The American people understand what it means to refuse to pay down credit cards and instead get new credit cards. They understand that is what government is doing. And they are tired of it.
If the Republican Party will not aggressively fight for real cuts and real reform in exchange for raising the debt ceiling, if at all, it very much will be time for a third party in this country.