Standard & Poor’s has taken an unprecedented step in reflecting its opinion that the effectivness, stability and predictability of American policy making and political institutions have been weakened during a time of ongoing fiscal and economic challenges. Driving the nail in the fiscal coffin, S&P reports that the outlook on the long-term rating is negative and that S&P could lower its long-term rating within the next two years. It is S&P’s assessment that elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden in a manner consistent with an ‘AAA’ rating.
The Obama administration demurs, responding that the S&P analysis contained ‘deep and fundamental flaws.’ As I have written often about the Obama administration’s fiscal responsibility, the horse has already left the barn. The only thing left behind is the stink. For the first downgrade of America’s credit rating in history, I blame in no special order the complete Obama administration, Harry Reid, Nancy Pelosi, Barney Frank and the Fed. The one group in Washington (and S&P knows this well, like the Tea Party or not) that is committed to doing the things S&P wants done is the Tea Party. In 2012, Americans will have a chance to bring in a new management team. America needs a leader with a long-proven record of fiscal responsibility, along with a long and proven record as a job creator. This, of course, is not brain surgery.
In recent months, you have been bombarded with editorials from the left and the right on the dire status of Uncle Sam’s finances and the prospects for an outright U.S. default. Much of what you have been exposed to is nothing more than posturing by politicians seeking to anger as few voters as possible and to maintain credibility for the 2012 election season. Rarely is what is best for America first on a politician’s mind. And now we have a first-in-history downgrade of America’s credit rating.
I have developed a presidential financial report card that will allow all Americans to put the records of Presidents Clinton, Bush and Obama in perspective. The report cards are for the first two years in office for the three presidents, with concentration on the financial variables our politicians have been focusing on in recent months — the deficit, marketable debt, federal receipts and revenues. To provide a stable base for comparison, I viewed each variable in terms of a relationship to GDP. The objective financial report card for each president is followed by a direct conclusion.
The track record for each president is graded in four comparative sectors — simply the raw percentage comparisons to GDP numbers and my attached grades. You may examine the raw data and attach somewhat different grades in a spot or two, but my guess is that you and I will be mostly in agreement. And it is hard for me to think that you and I would have a different final conclusion.
Here are my grades.
Bill Clinton, in his first two years as president, did a good job hitting all four of my target numbers. George Bush did President Clinton even better and rang up a perfect score on his two-year budget financial report card. Barack Obama gets four easy, no-holds-barred Fs for his first two years as president. Moreover, looking at President Obama’s prospects for a third year in office, the Fs will likely continue. In 2012, President Obama will go before the American people with his report card of Fs and ask to be promoted to a second term.
Can any logical American observing such a report card of failure be likely to vote Mr. Obama to a new term as president? Clearly President Barack Obama must be consigned to a single term as president. And his legacy as president will go down as one of the most profligate in American history.