A Moodys chief economist also said;
Doh! A bad time for spending cuts? - Jul. 11, 2011There is a danger in cutting too much too soon, according to Mark Zandi, chief economist at Moody's Analytics, who favors big spending cuts so long as they don't take effect for a few years.
"I wouldn't add to cuts this year or next, given the fragile economy," Zandi said. "There is already plenty of restraint on the books."
Spending cuts could trigger a second recession. That would not only be worse than getting a credit downgrade, but would lead to one anyway.
The Republicans are the ones that have deliberately obfuscated the issue by making this look as if cutting expenditures was the issue.
Don't think there is any confusion on my part. In the next few days there will be an agreement in Washington and the debt ceiling will be raised.
And all indications are that in the coming months the credit rating of the U.S. will still get lowered. And the reason for the drop in rating is the out of control debt and continued deficit spending.
Here's a "companion" video to the article in the OP. It's called "Aftershock" by Bob Weidemer (based on the book of the same name) giving an interview outline the consequences of Congress not addressing entitlement reforms long ago and Wall Street screwing us. I think everyone should give this video a look.
(Warning: Weidemer pimps his newsletters near the end of the video, but he spells out how we got to this point and the actions that need to be taken to avert a total economic collapse very clearly.)