Stocks were down this morning, and the interest rate on Treasury bonds fell.Sure enough, Bloomberg confirms.
In other words, bond investors' first reaction after SP's downgrade of U.S. government debt was to be even more eager to lend money to the U.S. government.
In a way, investors responded to Standard and Poor's rating just the way it deserves. Of course, the story is not that hard to explain. The rating, and other economic worries, sent the stock market tumbling, and investors turned to safer investments, that is, US treasury bonds. So rather than driving the government's borrowing costs up, as more people rushed to lend more money to the government, the government's borrowing costs actually went down.
No one should take any comfort in the fact that stock market is nose-diving, of course. But if the intention for credit rating downgrade was to make it harder for the government to borrow money, it appears to be having the exact opposite effect.
The problem with the stock market is multifold, and most of it has to do with the economy. Not just the US economy but the global economy. Economic stress in Europe and Asia are affecting us as much as our stress is affecting them. But the common thread running through both the downgrade and the economic weakness? The hostage taking of the US economy by the Tea Party Republicans. And the American people are rightfully sick of it. News comes on the heels of family-members-and-paid-staffers level approval rating for a Congress held hostage by Teabagging nutjobs, it gets worse for them, according to a just-released USA Today/Gallup poll:
If congressional elections were held today, Americans by 49%-45% say they would vote for the Democratic candidate over the Republican.Let this serve as a warning. Should the Tea Party continue to hold America hostage, this will only get worse. People. Hate. Congress. Pure and simple. If the Republicans in Congress are going to keep playing games instead of taking responsibility for the country, and doing what is right to move the country forward, voters are going to make them pay a price. Mitch McConnell might have as his primary goal the demise of the Obama presidency rather than the advancement of the American economy, but voters have other plans. If the Tea Party continues on its current political hostage-taking trajectory, the stock market will not have the only free-falling numbers.
Hey, I got an idea. How about Congress cuts its summer vacation a little short and gets back to work, let's say, tomorrow? What the F are we paying you for?
Yes, the poll from USA Today/Gallup also has some pretty tough news for President Obama. His still beats out the generic Republican, but his numbers are below the 50% threshold. Is it cause for concern? You betcha. In a tough environment, the President always gets blamed. And we have no help in this situation from the Professional whiners on the Left. But ultimately in a presidential race, people will have to decide whether they want to hire someone who has been working day in and day out (and we must do more to get that message out) to help people or someone who wants to sell the country wholesale to their corporate benefactors. On that count, I am very confident that the president will come out on top.
Congress, on the other hand, is another matter entirely. Candidates for Congress are much-less well known and people tend to punish the party more than the person. And the Tea Party's credibility, message, and popularity has been devastated by the way they have been screwing with governing - both at state and national levels. Speaking of which, there are recall elections coming up in Wisconsin tomorrow. Democrats need a net gain of just 3 seats (out of the six Republicans up for recall) to recapture the WI Senate and stop Scott Walker's radical agenda. Can you chip in, volunteer or make some calls? Head over to WisDems.org and help out!