S&P's downgrade shows the need for tax reform

Joe Nocera writes in the New York Times' Opinion on 8/8/2011 that the downgrade “was less about economics than politics.” S&P was frightened by the “spectacle of an unyielding minority of Tea Party Republicans ready to push the country into default rather than accept even modest tax increases to help bring down the deficit.” S&P suggested that it did not believe Congress would let the cuts expire at the end of 2012, as they’re supposed to.

Professors Menzie D. Chinn and Jeffry A. Frieden write in New York Times' Op-ed on 8/8/2011 that the deficit deal “sidesteps the fundamental challenge the country now faces: who will pay to fix [for the] irresponsible tax cuts…failures of regulation and the resulting housing and financial booms and busts?” According to them, America needs more spending, not less "with unemployment at 9.1 percent, and long-term joblessness at record levels [and] the S&P decision to downgrade reflects, in large part, the expectation that Republicans will not allow the Bush tax cuts to expire.”