Why would you single out Obama? Have you actually read Standard & Poor´s explanation for the downgrade?
"The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy."
Good reason right there to blame Obama (Presidents get all the blame, right?), he had two very good options on get the US budgets to a reasonable goal of being balanced and he said they were non-starters. First specific one was the, "Cut, Cap, and Balance" and the second one he really didn't like was the Penny Plan (1% annual cuts for the next 8 years). He and the Democrats offered smoke and mirrors (promises some day that the budget would get cut that will never happen) which would resulted in a $25T debt by 2012. Obama took office at just under $10T and he will (hopefully) leave in 2012 at just under $18T, in just 4 years.
Actually, any plans for "real reforms" would have to include at least the option of higher tax rates which the Tea Party appears to be fundamentally opposed to for purely ideological reasons.
I'll call you out on that one right here and now. How much more taxes? Give me some numbers because if we taxed 100% of everyone making $100K or more a year, we can't balance the budget, we are still at least $400B shortly yearly (I think the numbers at $1.1T generated by the 100% tax rate at $100K plus).
Well, tax rates in the US were higher back then
Only for those making less money, they actually had to pay income tax (vs 49% of American tax filers who paid 0% in 2010). Now if you are referring to top tax bracket, in 1930, was a whopping 25%! What good old FDR did to insure the Great Depression continued was to jump that tax rate to 58% and the bottom rate to 10% in 1932 and then to 68% for top rate and 11% for the bottom rate in 1936. That is a perfect method of taking money out of the economy to insure economic depression continues. Let me quote you something that was stated in May of 1939 at the House Ways and Means Committee that I found at:
http://www.artdiamondblog.com/archives/2009/03/_in_new_deal_or.html.
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Henry Morgenthau, Jr. was FDR's Secretary of the Treasury from 1934-1945. In the following important quote, he admits that the big New Deal stimulus spending programs had failed.
(p. 2) We have tried spending money. We are spending more money than we have ever spent before and it does not work. And I have just none interest, and if I am wrong . . . somebody else can have my job. I want to see this country prosperous. I want to see people get a job, I want to see people get enough to eat. We have never made good on our promises. . . . I say after eight years of this administration we have just as much unemployment as when we started . . . . And an enormous debt to boot!"
But you are right, taxes will have to go up if someone (other then Obama as President) does not stop the bleeding very soon. I am at the tail end of the Baby Boomers, when I retire, there is going to be two workers left to support me plus real world interest rates on $30T+ and the rest of Federal Budget. You will see Truman's tax rates during the 1950s (JFK lowered them significantly, Ike only cut a few % off) as the norm. If you think the very rich and multi national corps are sticking around, put down the crack pipe already. If you doubt my words, take a look at census data for CA and NY, the rich are leaving heavily taxed states for states that have minimal taxation. Depending on my financial status at my retirement, I may even leave and I won't be the only middle income earners to do it either, many retirees go to Panama or Costa Rica to retire already.
Back on topic, S&P was not the first to do this, the only independent Chinese rating firm already lowered the US rating last Nov, and is about to do it again:
That deserves its own thread!