And Kudlow non concurs. Ok, I'll go with Kudlow. Europe lead by the Good East-German Angela Merkle sorts it out.
"Whether or not one agrees or disagrees with Standard & Poor's decision to downgrade the federal government's credit rating, the agency's message was never about U.S. debt default. Instead, S&P was warning that U.S. fiscal trends are deteriorating and our future debt trajectory is going up, not down.
Serious entitlement reform is not yet on the table. Nor is pro-growth tax and regulatory reform. And since none of this is brand-new news, I don't think people should be shooting the messenger.
Getting our debt and spending under control is very important. But the fact remains that warnings from S&P, and even lesser warnings from Moody's, could spur Washington into taking more aggressive action. So could the market sell-off itself.
Now, if the Paul Ryan budget had passed the Senate and had been signed into law by the president, that combination of tough spending control, transformative Medicare reform, and pro-growth tax reform would have gotten us out of this fix. Alas, it was not to be. But tax rates are not going up, no matter what President Obama keeps telling us. Tax hikes would never get past the House Republicans.
Also, I think there's a big overreaction going on to the problems in Europe. The most likely scenario is that the leaders of the European Union and the European Central Bank will take whatever stabilization steps are necessary while at the same time pushing for serious fiscal reforms."