So Standard & Poors describes the U.S. political process in their recent downgrade of our long-term sovereign credit rating.

If, as an old saying goes, an actuary is an accountant without a sense of humor, then analysts might be economists without a sense of perspective. 

There is a fundamental debate going on in this country over the role of government.  That debate has been fueled greatly by the stimulus spending and its effect on our debt and economy.  Read how Standard & Poor's interprets this:

"The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability."

The analysts too often see a balance sheet like any other (yes, I oversimplify to make a point) and miss the dynamic at play with the federal government.  When the federal government spends money (particularly as it has recently) and acts it affects the private economy in a way Wal-Mart or General Electric don't when they spend money or act - there is a displacement of the private sector rather than a fueling of growth.  Witness cash for clunkers or on a more complicated level the effects of the welfare state on the rest of the country's social structure.

To be fair to Standard & Poor's, I'll offer an additional quotation from the rating rationale:

"Standard & Poor's takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.'s finances on a sustainable footing."

For some additional perspective, let's quote Churchill on this "contentious and fitful process":

"Many forms of Gov­ern­ment have been tried, and will be tried in this world of sin and woe. No one pre­tends that democ­racy is per­fect or all-wise. Indeed it has be said that democ­racy is the worst form of Gov­ern­ment except for all those other forms that have been tried from time to time.…"

Let the process move on.