Paul Krugman is Right. A Downgrade Doesn’t Matter

From my column on TheBlaze.com

Trust me, I understand. This is no way to introduce yourself to The Blaze audience, but … I have to do it…because it’s true. Paul Krugman is right.

That is not a sentence I make a habit of repeating. But when Krugman says it doesn’t matter whether the ratings agencies (S&P, Moody’s, Fitch) downgrade American debt from AAA to AA … he’s right. That’s not a political thing, a partisan thing, a left-right thing, it’s just an economic reality. Let me explain.

First thing first. Let’s not pretend that S&P, Moody’s and Fitch are pillars of wisdom and foresight with a stellar record of accuracy. In fact, in the clutch they’re less Dirk Nowitzki and more LeBron James. From 2002-2007 the ratings agencies slapped AAA ratings on subprime and Alt-A securitized loans that amounted to crap and almost sunk the economy.

Secondly, the opinion of the ratings agencies are just that…opinions.

To read the entire column…click here.

Debt and Deficit, Finance

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