Late Friday Standard & Poor’s cut the credit rating of the United States from AAA to AA+.  Subsequent events have been as pointless as predictable.  We imagine the thinking has gone something like this:

WHITE HOUSE:  A favorite from our playbook is to demonize through the media.  Americans like to blame the messenger.  Let’s combine the two.  Let’s put out press releases blaming S&P for our ills.  Extraordinarily high debt levels?  Political ineptitude?  Yup, that’s S&P’s fault.

CONGRESSIONAL DEMOCRATS:  If we’re asked about S&P’s action we’ll avoid the issue by telling everyone that companies need to pay more tax, we need to take on yet more debt to fund stimulus projects that don’t stimulate or create jobs, etc.

CONGRESSIONAL REPUBLICANS:  If we’re asked about S&P’s action we’ll avoid the issue by telling everyone President Obama isn’t an American citizen.

AVERAGE AMERICAN:  When we were kids we wanted to touch and hold things.  Our parents would tell us, “See with your eyes, not with your hands.”  Our parents were wrong.  Today they’d probably tell us, “Think with your brain, not with your heart.”  To hell with all of that.  Let’s panic.

FOREIGN DEBTHOLDERS:  Let’s scare the bejesus out of folks and delude ourselves by publically announcing we’re looking for ways to diversify our holdings.  No market other than the US Treasury market is large enough to absorb our cash surpluses but let’s pretend anyway.  It’s a huge waste of time but, what the heck, American Idol is in reruns.

It’s a hopelessly codependent relationship.  The uninformed will panic.  The politicians will pander to it.  The media will exploit it.

Believers in the validity and importance of ratings are keenly aware of the definitions.  S&P’s AAA means “extremely strong capacity to meet financial commitments” while AA means “very strong capacity to meet financial commitments.”  Is this the type of downgrade that should strike fear into our hearts?

Believers in law understand the 14th Amendment to the US Constitution does not permit debt default.

Believers in common sense (which, apparently, isn’t all that common) understand the US is the safest place in the world in which to put money.  It’s precisely what Warren Buffett told Bloomberg TV on Saturday – that the US merits a “quadruple A” rating!

Most curious is the ‘sudden’ nature of events.  S&P’s downgrade was in reaction to the artificial debt ‘crisis’ and the farcical ‘resolution’ thereto.  The driver of deficits and, thus, cumulative debt, is entitlement spending.  We’ve known this for a loooooooong time.  Why the ‘sudden’ rush to act S&P?

For the billionth time Washington, Wall Street and Main Street have conspired to create something out of nothing.  Will someone wake us when it’s time to care?