Jacob Heilbrunn

Moody's Blues

Moody's is getting the blues about America. It's threatening to downgrade the prized triple AAA rating that the U.S. government enjoys: "A credible agreement on substantial deficit reduction would support a continued stable outlook; lack of such an agreement could prompt Moody's to change its outlook to negative on the AAA rating." The dry language is a threat. In focusing on the contretemps over raising the debt limit, which is really a proxy for the larger fight about spending, taxes, and debt, Moody's is basically telling the government to get its fiscal house in order or else.

So what's the result? More finger-pointing, which is the way things get done in Washington. But Moody's blues do help change the tenor of the debate. Well, maybe not for everyone. Sarah Palin weighed in to announce that there is no debt crisis, at least when it comes to determining whether or not the ceiling should be raised or not. Let the ceiling collapse seems to be her motto. She thinks Treasury Secretary Timothy Geithner is making "false statements" about a "catastrophe" should Congress fail to act. It would be nothing less than a "failure of leadership" if Republicans sign off on raising it.

Of course the amusing part of the whole debt controversy is that Congress is only raising the limit to pay for what it already approved in spending. It doesn't have buyer's remorse. It just doesn't want to pay for its outlays.

Meanwhile, the jobs report, which is what really counts for the President, was anemic. Which is to say that Obama will struggle to become a president who gets reelected when the employment rate is over 9 percent. Mitt Romney said Obama has "failed America." The election race is bound to heat up. Right now Palin, Romney, Pawlenty and Gingrich (and Guiliani?) are vying for the presidency, or least giving the appearance that they may run for it in Palin's case. Her bus tour is a brilliant stroke, another chapter in the unpredictable Palin saga.

If the economy gets bad enough, she may even have a shot at the presidency.