It's very rare that a sovreign nation defaults because of outright inability to pay. I mean if you think about it, we could probably pay down our debt by raising taxes to an exorbitantly high rate and limiting spending to just the military and police. One former Soviet nation that was deeply in debt got out by forcing its people to work slavishly for little pay.
However, most well-intentioned leaders don't have the stomach for these measures (and the bad ones at least know they'll be the target of a coup if they try them), so they default. And the reality is that oftentimes, that's the rational choice.
So more than likely, willingness to pay was the only thing under consideration. And with elections nearing next year, I think they may be holding out for political change before they downgrade us further.
In all, I don't like the credit agencies or what the downgrade represents, but I can't disagree with it.
I agree that it's always more a matter of willingness in the case of sovereigns. But willingness depends on the extent of hardship a government would have to ask their people to endure (as you correctly point out). So if a country can pay its debt by printing money that hardship is greatly reduced or spread over a much longer period of time.
However, most well-intentioned leaders don't have the stomach for these measures (and the bad ones at least know they'll be the target of a coup if they try them), so they default. And the reality is that oftentimes, that's the rational choice.
So more than likely, willingness to pay was the only thing under consideration. And with elections nearing next year, I think they may be holding out for political change before they downgrade us further.
In all, I don't like the credit agencies or what the downgrade represents, but I can't disagree with it.