It wasn't a single press release, but an "official" recognition that the U.S. is hurtling along on an unsustainable budgetary path. We're borrowing more money each year than we spent as the ENTIRE federal budget each year in the 1990s.
Also, in many ways, Europe and Japan are in even worse shape, and the recent sell-off is probably more driven by European events.
If you read S&P's actual paper, it focuses on political dysfunction, not economic. For instance, they said that if the Bush tax cuts for people making 250k/year were allowed to expire, then they would have allowed the USA to retain its AAA rating, but the American political system seems incapable of making the necessary revenue adjustments to attain fiscal consolidation.
Of course, S&P is really just a bunch of corrupt idiots, so either way you shouldn't pay much attention to them.
The political dysfunction is only interesting to them inasmuch as it produces economic dysfunction. If Congress was deadlocked for months on end on, say, Don't Ask Don't Tell legislation, the thought of downgrading the US's debt rating would never have crossed their mind.
It's not a revenue problem, it's a spending-more-than-we-have-revenue problem. And I don't mean that it must be fixed with cuts only, but the idea that we can tax our way out of this problem is basically purely theoretical. With the real politicians we have, it won't work, unless after we fix the root spending problem.
Take everything Stephen Moore says with a giant grain of salt. He has some, er, very hackish tendencies, especially when veering away from research and trying to give a pretty finish to right wing policies on the WSJ op-ed page.
it's a spending-more-than-we-have-revenue problem
Which can be fixed either by increasing revenue or decreasing spending.
Raising taxes increases revenue. Pair Clinton-era tax rates with some very modest reforms to Social Security and some much more significant ones to Medicare, and we'd honestly be sitting pretty well.
And even if we did nothing, even now the biggest economic issue by far is jobs, not projected deficits in 2040.
Edited: upvoted you, because I can't conceive of why others should have downvoted you...
"Which can be fixed either by increasing revenue or decreasing spending."
That's actually not quite true. A truer statement would be that for a given constant level of spending deficit, it can be closed by either increasing revenue or decreasing spending. But you can't assume a constant level of deficit, because time progresses and politicians adjust based on their income and outflows. (Not necessarily in a good way, but they are looking.)
Try to put yourself more in a physics frame of mind than a political one. It's the difference between statics and dynamics. Solving the budget problem with a static snapshot of a dynamic process isn't going to work. With the track record that our politicians have, just handing them more money isn't going to solve the problem if they're just going to spend even more of it. A static-forces model of the political appropriations process fails to predict reality, the model where politicians dynamically increase their spending even more than revenue does historically fares better.
(... yes, I know it is odd to approach politics from the point of view of building models to predict reality and seeing which ones successfully, no sarcasm at all, I see hardly anyone take this approach. But there are in fact enough hard facts out there to have some success with this approach, if you can learn to take your science-trained sensibilities and look at the political world. Political science need not be an oxymoron, though I suspect an actual study of political science wouldn't look much like what is currently called that.)
Your model itself is a significant assumption, though. Consider the Clinton tax hikes combined with some moderate restrictions on growth in spending as a counterexample: they ultimately led to the closest thing to a budget surplus we've had in our lifetimes, ignoring details like whether we technically were in surplus or not.
It is fair to ask whether that's sustainable, as in the 2000s we saw our politicians take those projected surpluses and spend them on tax subsidies for the well-off. Which, indeed, is just what that model predicts. But that just speaks to the need to elect better politicians and create better institutions to act as an endogenous curb on unjustified spending.
Your tone suggests you think you're contradicting me, but your last sentence is simply a restatement of my point. (I'm still trying to work out a clean way of stating it, so I take responsibility for that.) The solution needs to solve the dynamics of the problem. It may visibly manifest as tax hikes and/or spending cuts, but those will be effects, not cause.
what they meant was in addition to the $4 trillion saved by current budget compromises over 10 years that getting rid of the Bush tax cuts would add $4 trillion in ten years thus placing $8 trillion of that $14 trillion deficit as no longer being an impact in ten years due to the surpluses we would have each budget year.
It seems to me that reducing the deficit by 50% is damn good idea.
Also, in many ways, Europe and Japan are in even worse shape, and the recent sell-off is probably more driven by European events.