No, Krugman is upset because he is of the belief that things were just going fine, at least debt-wise, until those mean, nasty Republicans engaged in debt-limit brinksmanship. In other words, his only beef is that the government is not taxing us enough. (Remember, he already has declared that the government "is not broke." Yes, according to Krugman, as long as the government can borrow money, its finances are in solid shape.
...there is a case to be made that the madness of the right has made America a fundamentally unsound nation. And yes, it is the madness of the right: if not for the extremism of anti-tax Republicans, we would have no trouble reaching an agreement that would ensure long-run solvency (Emphasis mine).I really must admit to being dumbfounded here. Does he really believe that had some of the Republicans not demanded budget cuts, everything would have been just fine? Does he really believe that hitting the borrowing-and-spending accelerator somehow would magically have transformed this economy and federal budget and pushed us into the black? I'm sorry, but this is astounding.
One does not have to support the Republicans to know that things are in desperate shape. The government's insistence that everything is just fine, and that prosperity is just around the corner, and that all the sick patient needs is just another "fix" of cheap credit is utterly delusional.
Whether or not one can quibble with S&P for downgrading U.S. Government debt, one thing is for certain: the U.S. Government is not solvent, not by a long shot. It is able to pay back bonds by borrowing money, something that is ANY other entity were to do would be considered criminal fraud. Borrowing from Peter to pay Paul is not an economic program; it is a de facto admission of bankruptcy.