Maybe Stock Market Isn't the Right Gauge?
Let me see if I get this.
The country is driven to the very brink of defaulting on its national debt because the government is unable to act on legislation that was purposely overly complicated by both sides.
We're told that if that logjam isn't dealt with on time, our bond rating could be affected and the stock market could tumble.
A "compromise" is reached. (Don't get me started.) The crisis is averted, at least in the main.
The next day, our bond rating is unchanged but the forecast for the bond rating is downgraded severely. Given that bonds are always trading on the future, this seems at least similar to a downgrade in the bond rating itself, just not of the same immediate effect.
And, oh, yeah. The stock market plummets anyway. This time, the excuse given for the drop is investor concern about the slowness of the recovery. A slowness that has just been greatly exacerbated by the passage of a "compromise" debt ceiling bill that both parties are guilty of mangling worse than anyone could have imagined a year ago.
So Wall Street drops if we don't raise the debt ceiling. It encourages the irrational and almost unprecedented tying-together of the debt ceiling (which deals with debt already incurred) and upcoming budgets (which do not deal with debt already incurred, duh). Then when it gets what it wants, it plummets out of concern for the consequences of its actions.
Maybe we need to find a better barometer of our nation's economic state than the Stock Market, which has actually long ago stopped being a valid indicator of economic movement because of the day trading and automatic triggering brought to bear in the past 15-20 years.
