The spin meisters in both parties are working overtime trying to control the interpretation of Standard & Poor’s downgrade of US credit. Is it an Obama Downgrade? A Tea Party downgrade?

Adam made a good case for Republican culpability earlier, and I certainly agree with him that the GOP acted irresponsibly in the the debt limit battle. However, in my view, the answer is: neither. It’s an S&P downgrade, pure and simple. This is about the rating agency, not the US budget or political system.For those who believe that this downgrade had anything to do with the federal budget situation and actual debt levels: c’mon, get serious. S&P made a political argument, not an economic one. Besides, the “Obama Downgrade” really makes no sense; after all, Obama had a lot more to say about budgets and deficits in 2009-2010, and there wasn’t even a hint of a downgrade then. Now, it is true that electing a whole bunch of Republicans who (rhetoric notwithstanding) are far more interested in low tax rates than they are in the deficit probably is correctly assessed as harming future fiscal balance, but it’s hard to see how that’s Barack Obama’s fault. It doesn’t matter, though; S&P clearly didn’t care what the actual budget numbers were, so blame for current and projected future budgets is mostly irrelevant to what they did.

This gets to the “Tea Party Downgrade” idea. A lot of liberals are buying this; the idea is that the political system has in fact, as S&P says, become unstable because the Republicans threatened to not raise the debt limit. I’ve certainly agreed that there’s something really dysfunctional about the current Republican Party, but on the whole I think this is pretty badly overstated. The anonymous blogger at “Economics of Contempt” is quite right: Tea Party conservatives are likely at the height of their influence in Congress, and the odds are good that by 2013 (the next time the debt limit needs to be raised) they will either be diminished through electoral losses or more conciliatory. We’ve been through this before: this looks an awful lot like 1995, and we didn’t get government shutdowns during Bill Clinton’s second term (or either of George W. Bush’s, for that matter). Yes, if the political context turns out to remain exactly the same in the future, we’re apt to see more brinkmanship…but after all, we’ve had two showdowns now, and the government didn’t shut down in the spring or run out of borrowing authority on August 2.

No, the US economy may not be in great shape, and the policies chosen by the government may not be adequate to address current economic challenges, but the government isn’t going to go belly up any time soon. Paul Krugman is right; S&P is basically a bad joke (and one, don’t forget, that has pending business with the very government that it is rating). S&P has a long history of getting things wrong, and this is just another example of that.