Yesterday, bond rating agency Moody's threatened to downgrade the debt of the United States if Congress doesn't agree to increase the country's debt ceiling.
The drop-dead date for hiking the debt ceiling, which will prevent the U.S. government from borrowing more money to fund its enormous budget deficit, is August 2nd. If Congress hasn't raised the debt ceiling by then, Treasury Secretary Tim Geithner says, the U.S. will default on its debt and a catastrophe will ensue.
Moody's appears to agree -- a view that prompted its warning yesterday.
But if the hope was that this warning would finally prompt Congress to drop partisan politics and remove the threat of imminent default, that hope was in vain.
In response to the warning, both sides dug in. The Republicans pretended that Moody's had said that if the country didn't radically cut spending, the debt would be downgraded (Moody's didn't say that). The Democrats, meanwhile, viewed the warning as a way to browbeat the Republicans into caving on their insistence on spending cuts and just raising the debt ceiling.
In other words, even with the most credit-worthy country in the world on the verge of default, it's politics as usual in Washington.