The S&P Downgrade Market Plunge Myth
Monday 15 August 2011
by: Dean Baker, Truthout | News Analysis
The Wall Street crew that wants to cut your Social Security and Medicare benefits are sensing that victory is in sight. They have managed to knock jobs completely off the agenda and have made deficit reduction the near exclusive focus of economic policy in Washington. They are now setting the stage to have the Congressional “super committee” produce a deal that will mean large cuts in both programs.
The backdrop for these cuts is that the country is in crisis and that we have no choice. A central part of this story is that the stock market crashed last week in response to the Standard & Poor's (S&P) downgrade of US government debt. The Wall Street crew and their allies in the media and Congress will tell the country that if we don't have the cuts in Social Security and Medicare demanded by S&P then we run the risk of further downgrades. This raises the prospect of further market panics and the complete wreckage of the economy.
This story has as much credibility as John Edwards' tales of marital bliss during his presidential campaign.
Phi Beta Iota: A couple of things are clear, the first being that Barack Obama is not in charge of anything, the second being that New York–Wall Street, Goldman Sachs, the Koch Brothers–is. From the Tea Party funded and manipulated by the Koch brothers, to the idiotic lack of intellent analysis from the newspapers and broadcast stage, what we have here is theater. The truth is nowhere to be found between New York and Washington.