Credit Raters Warn GOPers In Denial About Debt Ceiling

May 19, 2011 2:11 pm ET — Alan Pyke

The conservative media have been denying that a default on U.S. debt would hurt the economy for a while now, but at least elected Republicans used to acknowledge that failure to raise the debt ceiling would mean a "financial disaster" and "collapse and calamity throughout the world."

This week, however, Republican budget leaders Rep. Paul Ryan (R-WI) and Sen. Pat Toomey (R-PA) are taking up the mantle of default denialism — Ryan now says his pals on Wall Street won't mind "a day or two or three or four" of default, and with rank-and-file GOPers picking up the thread, a needless and catastrophic default suddenly seems possible. Asked about this new recklessness from the right, credit raters at Standard & Poors remind everyone that we can't flout the rules of international finance just because Republicans say so. As Brian Beutler reports:

"A sovereign's failure to service its debt as payments come due is a default according to S&P's sovereign rating criteria," writes John Piecuch, spokesman for Standard & Poors, one of the "Big Three" credit ratings agencies, in an email to me. "In that case, the rating would be lowered to "SD" (Selective Default)."

Furthermore, raters at Moody's said in a February report that "If debt service were interrupted — however briefly — we would consider downgrading the rating" on U.S. debt. Flirting with such a downgrade would stop our economic recovery in its tracks, derailing the private-sector momentum that's created 2.1 million jobs over the past 14 months.

Maybe Republicans are counting on the White House to repeat its only-adult-in-the-room act from last December's tax fight, but with Toomey and Ryan now following Rush Limbaugh down the garden path to default, the GOP is moving ever farther from their purported focus on jobs.