President Barack Obama made two fundamental mistakes today in his press conference which was intended to calm the markets. First, he did not lead off with a moment of reflection on the loss of American military lives in Afghanistan over the weekend. Second, he completely missed the boat on why Standard & Poor’s (S&P) lowered the credit rating of the United States.
The President should have led off his press conference with prayers and condolences for the families of the 30 members of the U.S. military who lost their lives in Afghanistan over the weekend. Instead, the President waited until the end of his statement to recognize the ultimate sacrifice of these heroic Americans. The lives of the men and women of the armed forces should not ever be relegated to “one last thing,” and doing so shows a lack of common sense and compassion on the part of the President:
One last thing: there is no one who embodies the qualities I mentioned more than the men and women of the U.S. Armed Forces, and this weekend we lost 30 of them when their helicopter crashed during a mission in Afghanistan. Their loss is a stark reminder of the risks that our men and women in uniform take every single day on behalf of their country. Day after day, night after night, they carry out missions like this in the face of enemy fire and grave danger.
Instead of condolences, the President began with the claim that S&P downgraded the United States from an AAA credit rating to AA+ because of political infighting over the debt ceiling:
On Friday, we learned that the United States received a downgrade by one of the credit rating agencies. Not so much because they doubt our ability to pay our debt if we make good decisions, but because after witnessing a month of wrangling over raising the debt ceiling, they doubted our political system’s ability to act.
However, S&P’s overview stated clearly that the plan attached to the debt ceiling increase is insufficient to stabilize America’s long-term debt problem:
The 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’s medium-term debt dynamics.
The President seemed to blame “gridlock” on the part of others, but you can’t have gridlock without two parties that are unwilling to negotiate. The President demanded tax increases as one condition of increasing the debt ceiling, and he further demanded that the size of the increase be more than $2 trillion.
The President failed to release his own plan, yet he continues to claim that there are some “good” ideas in other plans without specifying the nature of these ideas.
Republicans and Democrats on the bipartisan fiscal commission that I set up put forth good proposals. Republicans and Democrats in the Senate’s Gang of Six came up with some good proposals. [House Speaker] John Boehner and I came up with some good proposals when we came close to agreeing on a grand bargain.
The President needs to admit that he is part of the problem. Obamanomics, the ugly child of Keynesian economics, has been an abysmal failure. At a time when credit ratings agencies want to see austerity programs, the President continued the call for more spending.
We should also help companies that want to repair our roads and bridges and airports, so that thousands of construction workers that have been without a job for the past few years can get a paycheck again—that will also help to spur economic growth.
Dumping another $1 trillion into the economy for make-work jobs will not create long-term jobs, will not magically create consumer demand, and will make the debt problem worse. The demotion of the United States’ credit rating is not an opportunity to push for more spending.