For the first time in our nation's history, the United States has lost its AAA credit rating. Standard and Poor's, a credit rating agency downgraded America's rating to AA+. The primary reason for the downgrade was because the debt reduction plan approved by Congress did not go far enough to stabilize the debt situation in America. So what effect will the downgrade have on the United States? For average Americans, it will most likely mean higher interest rates, which in turn will slow down economic growth. Higher interest rates will likely discourage people from borrowing money. A lack of borrowing could lead to fewer home sales, fewer car sales, and fewer new businesses. Essentially every area of the economy would be adversely affected at a time when we can least afford it. The downgrade in America's credit rating could also lead to instability in world markets. This instability would most likely be reflected in the stock market. America's downgrade could also discourage other countries from wanting to invest in the U.S. economy. It is unfortunate that our leaders in Washington allowed our great nation to get to this point. While President Obama will undoubtedly receive the blame for our credit downgrade, it is the poor financial decisions of previous presidents that have led us to this day. Our current President owns some of the blame, but so too do past presidents who have simply kicked the can down the road so that it would become someone else's problem. Now more than ever, our leaders in Congress need to work together in a bi-partisan way to do all that we can as a nation to get our AAA rating back. Hopefully the wealthiest nation in the world will learn a valuable lesson and spare itself the embarrassment of ever having to go through something like this ever again.
It's a society that still thinks it is entitled to more than it can provide for itself that is to blame. Political leaders (of both parties and all branches) tell the mass of voters that they deserve better and that they will deliver precisely that when elected. Voters send them to Washington to seize money from those who have it and provide the masses with that to which they are entitled.
ReplyDeleteFor generations we have insisted that we are entitled to more than even the great wealth of our nation can provide. Like so many families in our country, reality is a bitter and brutal pill that we may no longer be able to put off.
When I ran for alderman there were dozens of people who, when I knocked on their doors, didn't want to hear about good government. They wanted the city to build new things like parks, monuments, city buildings, roads, and so on. "What will you provide for the community if I vote for you?" they said. When I asked how they wanted me to pay for it I was told that businesses can afford more taxes or that we should ask the state or President for the money. There's plenty out there, I was told.
Alas, there is not. We should strive to have no credit rating in this country because we should strive to be a country that pays for the things it needs in cash and then doesn't spend anything extra on what the majority of elected officials think we have to get in order to keep electing them.