We can examine the report at greater length if you like, but that won't change a thing:

Note that "political brinksmanship" is S&Ps term, no one elses. The debt ceiling extension was a regular and routine vote until House Republicans decided to make it a doomsday scenario; this, combined with their refusal to even consider higher taxes (which S&P references several times in their report) directly and greatly contributed to the bond rating cut. You can dispute that if you like but if you so choose you're debating Standard and Poors statement of their rationale, not mine. Let's continue, though the rest reads much the same:

Even when S&P explicitly says it takes no position on HOW America should reduce its debt, referring to that desired reduction as "the mix of spending and revenue measures" implicitly shows they want the same thing as the US public (and Democrats SAY they do): A MIX of spending cuts and revenue increases. Simply closing tax loopholes would only nominally address revenue shortfalls, just as withdrawing from Iraq and Afghanistan will only nominally address spending excesses.

Short of S&P saying, "raise taxes or we'll cut your bond rating again" I don't know how much more clear they could be.

As for both sides digging in their heels, that's ridiculous. It's common knowledge Democrats want tax hikes and Republicans want spending cuts. It's also common knowledge the Democrats STARTING position in negotiations was to accept $1.5 trillion in spending cuts, but they wanted to include tax cuts to achieve a $4 trillion dollar "grand bargain" (the same $4 trillion figure S&P told us long ago was necessary to avoid a bond rating reduction). First Boehner and then Cantor walked away from that, even when Obama offered to throw in a reduction of SS CoLA that would be VERY unpopular with the Dem base and consequently hard to sell to Pelosi and Co. What we get instead is nominal spending cuts, mostly already planned defence cuts, and Obama won't have to deal with the debt ceiling again because he won't be President in 2013. "Who's right" matters a great deal, because if the spoiled deluded people who want tax breaks at any cost continue prevailing we can expect independent analysts to continue downgrading our credit. If you want to put in terms of "my side vs. yours" though, MY side isn't the one saying a credit default would be no big deal or that the President should resign over a credit rating reduction caused by dangerous Republican grandstanding and addiction to tax breaks.

We could easily get a handle on our debt if we cut spending and raise taxes, but that's the only way; debate that if you like, but you're debating it with Standard and Poors, not me.