Over the last two months, numerous political commentators, as well as leading Democrats and Republicans, have vehemently insisted that a deal on the debt ceiling was necessary to avoid debt default and credit downgrades. Unsurprisingly, these happened to be the same commentators and politicians who did not see the crisis of 2008 coming and who have swallowed whole the ludicrous claim of “economic recovery” still being pushed by the Federal Reserve and the Bureau of Economic Analysis.
And once more, all of these public Panglosses have been proven wrong by events. This time, however, it took only three days to demonstrate their observable incompetence. The downgrade of U.S. credit was inevitable because the salient issue was never the debt ceiling or the inability of the federal government to borrow more money, but rather, the fact that it was already borrowing too much.