Fol­low­ing in the foot­steps of Stan­dard & Poor’s, which down­grad­ed U.S. cred­it to AA back in August, anoth­er one of the big three Wall Street rat­ing firms has decid­ed to play the ulti­ma­tum game, after Con­gress’ “super­com­mit­tee” failed to agree on a plan to imple­ment spend­ing cuts last week.

Fitch Rat­ings gave the Unit­ed States until 2013 to come up with a “cred­i­ble plan” to tack­le its bal­loon­ing bud­get deficit before it down­grades the coun­try’s cov­et­ed AAA rating.

The rat­ings agency said on Mon­day it revised to neg­a­tive from sta­ble the out­look on the U.S. cred­it rat­ing after a spe­cial con­gres­sion­al com­mit­tee failed last week to agree on at least $1.2 tril­lion in deficit-reduc­tion measures.

“The neg­a­tive out­look reflects Fitch’s declin­ing con­fi­dence that time­ly fis­cal mea­sures nec­es­sary to place U.S. pub­lic finances on a sus­tain­able path and secure the U.S. AAA sov­er­eign rat­ing will be forth­com­ing,” the rat­ings agency said in a statement.

Fitch has some nerve lec­tur­ing the U.S. gov­ern­ment on fis­cal respon­si­bil­i­ty. Fitch and its fel­low Wall Street rat­ing hous­es Moody’s and Stan­dard & Poor’s pre­cip­i­tat­ed the very eco­nom­ic cri­sis that con­tin­ues to drag on to this day. They hand­ed out AAA rat­ings like can­dy dur­ing the run-up to the col­lapse of Sep­tem­ber 2008.

And they still haven’t learned their les­son, as Bloomberg’s Robin Farzad points out in this edi­tion of Busi­ness­week.

On Nov. 21 a court-appoint­ed trustee esti­mat­ed that at least $1.2 bil­lion is unac­count­ed for at failed bro­ker­age MF Glob­al. Sunk by some risky bets on Euro­pean sov­er­eign debt, the firm run by for­mer New Jer­sey Gov­er­nor Jon Corzine filed for Chap­ter 11 bank­rupt­cy late last month, the eighth-biggest fail­ure in U.S. cor­po­rate history.

While that’s trag­ic for some clients, it’s an out­right embar­rass­ment for the three largest rat­ings firms, Stan­dard & Poor’s, Moody’s Investors Ser­vice, and Fitch Rat­ings. They all rat­ed MF Glob­al invest­ment grade a week before its bankruptcy. 

“Where is the out­rage?” asks James H. Gellert, chief exec­u­tive offi­cer of Rapid Rat­ings, which had rat­ed MF Glob­al at junk for two years. “Things have got­ten absurd.”

We’d argue that absurd is actu­al­ly an understatement.

Fitch, S&P, and Moody’s did­n’t see MF Glob­al’s col­lapse com­ing, just like they did­n’t see the down­fall of AIG or Lehman Broth­ers com­ing, just like they did­n’t see Enron’s fail­ure com­ing… or Tyco’s… or World­Com’s. In fact, these self-appoint­ed experts have failed to fore­warn us of pret­ty much every major U.S. cor­po­rate col­lapse dur­ing the last decade. We can’t trust their rat­ings. So what good are they?

Iron­i­cal­ly, if Con­gress con­tin­ues to dead­lock on fis­cal mat­ters, our deficit prob­lem will begin to solve itself. In part, that’s because the Bush tax cuts are set to expire at the end of this year, but there’s more to it than that. The Cen­ter on Bud­get and Pol­i­cy Pri­or­i­ties has esti­mat­ed “doing noth­ing” would reduce the deficit by $7.1 tril­lion over ten years. This bears repeat­ing: If Con­gress lets tax cuts and oth­er mea­sures expire, the deficit will go down by $7.1 tril­lion over ten years.

So what we need is not “time­ly fis­cal mea­sures” to “place U.S. pub­lic finances on a sus­tain­able path”. Rather, we need the oppo­site.

We need Con­gress to not con­tin­ue what it has been doing for the last few years: Bor­row­ing and spend­ing while cut­ting tax­es at the same time. That’s the irre­spon­si­ble, reck­less behav­ior that has caused our deficit to get too high.

The fed­er­al gov­ern­men­t’s bud­get deficit, inci­den­tal­ly, isn’t the bogey­man it is often made out to be. The Unit­ed States has actu­al­ly run a deficit for most of its his­to­ry, and it has­n’t caused us to self-destruct. In fact, Andrew Jack­son was the only pres­i­dent who ever suc­ceed­ed in zero­ing out the deficit.

Our per­sis­tent deficit has­n’t stopped our econ­o­my or pop­u­la­tion from grow­ing. It has­n’t stopped us from devel­op­ing an extreme­ly pow­er­ful, tech­no­log­i­cal­ly advanced mil­i­tary. It has­n’t stopped sci­en­tif­ic research, space explo­ration, the expan­sion of our safe­ty net, or efforts to clean up and pro­tect our environment.

Amer­i­ca has climbed out of a depres­sion with a deficit, defeat­ed fas­cism with a deficit, and out­last­ed the Sovi­et Union in a decades-long “Cold War” with a deficit. We’ve already proved that our deficit is some­thing we can live with.

So we should­n’t be wor­ried that our gov­ern­ment has a deficit. What we do need to wor­ry about is whether we’re keep­ing it in check. And we haven’t been.

Most of the recent fis­cal insan­i­ty that we’ve expe­ri­enced was caused by a Repub­li­can pres­i­dent and a series of Repub­li­can-con­trolled con­gress­es, who saw fit to increase expen­di­tures while simul­ta­ne­ous­ly decreas­ing rev­enues. (And the mon­ey they bor­rowed was­n’t even spent improv­ing Amer­i­cans’ lives. It was spent invad­ing oth­er coun­tries, build­ing a big­ger police state with unprece­dent­ed sur­veil­lance pow­ers, and reward­ing their cor­po­rate bud­dies with sub­si­dies and tax breaks).

It’s their bad exam­ple we need to stop emu­lat­ing. If our com­mon wealth (com­prised of our col­lec­tive tax dol­lars, our mem­ber­ship dues in Amer­i­ca) keeps shrink­ing, we’ll have no abil­i­ty to pay for the pub­lic ser­vices that we want and need.

Many of the same Repub­li­cans who are preach­ing the let’s live with­in our means gospel now were vot­ing for pre­cise­ly the oppo­site when George W. Bush was in charge. Not that they’d admit that. Repub­li­cans these days act as if the Bush error nev­er hap­pened. Well, we haven’t for­got­ten it. And we won’t.

The real dan­ger we face is the prospect of Repub­li­cans gain­ing con­trol of the Sen­ate and the pres­i­den­cy. If that hap­pens, they’ll have the abil­i­ty to pick up where they left off dur­ing the Bush error, and they will take us down the road to fis­cal ruin. That’s the sce­nario that Fitch, Moody’s, and S&P should be warn­ing the coun­try about. But evi­dent­ly they can’t see that tragedy play­ing out in their heads.

Just like they did­n’t see the warn­ing signs that fore­told of the col­lapse of the casi­no that is Wall Street and the ensu­ing eco­nom­ic slump we’re deal­ing with now.