US Outlook: Barack Obama's rhetorical gifts used to be channelled to soaring optimism. Two years in Washington and he can manage only pithy cynicism. The US may lose its triple-A credit rating, he says, "because we lack a triple-A political system".
I hope this president breaks with etiquette and fashions his post-White House life not as a roving ambassador or philanthropist, but as an advocate for constitutional reform. Whether that post-White House life begins in 2013 or 2017, the events of the coming few days may well decide.
At the time of writing last night, there was still no clear route to a political deal that will raise the debt ceiling and allow the US government to pay the bills that its Congress has racked up, and while financial markets are less sanguine than they were at the start of the week, few traders have positioned themselves to bet on a default. This is not quite a "Lehman weekend", like the one in 2008 where financial markets hinged on the success or failure of talks on rescuring Lehman Brothers. But if we wake up Monday without progress, the day will be rocky.
It is worth reminding ourselves what the credit rating agencies have said about the US credit rating. These are the rules against which the political outcome will be measured. Standard & Poor's said it will strip the US of its triple-A rating "if we conclude that Congress and the Administration have not achieved a credible solution to the rising government debt burden and are not likely to achieve one in the foreseeable future... We may also lower the long-term rating if we conclude that future adjustments to the debt ceiling are likely to be the subject of political manoeuvring to the extent that questions persist about Congress's and the Administration's willingness and ability to timely honour the US's debt obligations."
The one thing that all the competing deficit reduction plans have in common (apart from their inability to garner enough to support to pass a Republican House, a Democratic Senate and a president threatening a veto) is that hundreds of billions of dollars of detail remains to be sketched. Budget cutting targets are not the same as specific cuts, as S&P well knows. Worse, one of the most likely outcomes appears to be a short-term extention to the debt ceiling and a cross-party commission on future cuts and tax rises, charged with reaching a deal in the hothouse atmosphere even nearer next year's election.
That cannot and should not satisfy S&P's criteria.
Citigroup yesterday put the likelihood of a US debt downgrade at 98 per cent, and I struggle to see where it gets the other 2 per cent from. That's the intention of Mr Obama's rhetorical flourish yesterday. When the triple-A rating is lost, it is to the political system that he hopes to pin the blame.