Defending S&P’s downgrade of the US’s credit rating

Lots of ink and many bits are currently being spilled analyzing S&P’s downgrade of the credit ratings of the United States to AA+ from AAA late Friday. Most of the talking heads in America continue to pretend to not to understand the dynamic of this action, and S&P, which hasn’t covered itself in glory over the past several years, admittedly, is taking a lot of flak for this—even Warren Buffett disagrees, and of course, Buffett is never wrong (except for those times when he is). Paul Krugman, with whom I normally agree, takes a number of pot shots, but I think misses the larger picture. Eschaton has an elegant little summary that a number of people, including Krugman, think summarizes what our reaction should be (and Eschaton, aka Duncan Black, is also an economist).
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