The US has Not Felt the Effects of the First Credit Downgrade … S&P Warns of Second Downgrade



Good grief, the United States and US markets have yet to feel the effects of the first credit rating downgrade by the S&P and now the credit rating agency is already warning of a second downgrade. I guess this can be considered a second shot across the bow just in case that politicians in Washington, DC did not take notice of the first one.

One day after lowering the nation’s platinum triple-A credit rating, Standard & Poor’s analysts warned Saturday that the U.S. government could face a second downgrade if the economy continues to struggle and the government fails to make the cuts outlined in the debt ceiling agreement.

The ratings agency on Friday downgraded the nation to AA+ for the first time in history, saying partisanship in Washington is preventing dramatic deficit reduction.

S&P managing director John Chambers told reporters on a Saturday conference call that the toxic mix of a listless economy and political infighting will cause government debt to grow.

At some point politicians are going to have to care about the fiscal future of the United States rather than their next election and who has power in the House, Senate and Presidency.  The days of out of control spending are over. The US Nanny state government can no longer be all things to all people. It is not only waste and fraud that has to be corrected withing government spending, its whether certain departments and services are even required any longer.

Is it really that far a stretch to require the US government to balance a budget? What a novel concept to only spend what you can afford, rather than going into constant, permanent debt to pay one’s bills. As Outside the Beltway stated, Washington, its time to clean up your act.

It is no coincidence that the historic downgrade of the US credit rating by S&P took place under the presidency of Barack Obama. Of course for far too many years the politicians in DC have spent like drunken sailors. My apologies to drunken sailors as they actually spend their own money. However, under Obama, the most liberal President the United States has ever seen, has pushed government spending and the Nanny state to unheard of heights, or when it comes to the economy, depths.

Since the S&P has downgraded US credit, the blame game has begun. Make no mistake about it, there are many who took part, but the buck stops with the President. It was Obama who initially put forth a $3.7 billion budget this year that was voted down unanimously 97-0.  It was also Barack Obama who initially wanted a clean bill to raise the US debt limit. All this would have done is raise our debt.

The hell with the credit downgrade, all we have to do is get our fiscal house in order and the credit ratings will take care of themselves. How could anyone think that maintaining an unsustainable situation is the answer, that is fiscal suicide. There is no reason why more revenues should ever be given to a bunch of habitual wasteful spenders. NONE! Seriously, how pathetic is it when a communist country like China tells the United States must cure its addiction to debt.

Beijing’s reaction to the downgrade was the harshest among foreign leaders. Japan — which held $882 billion in United States Treasuries at the end of last year, making it the second-biggest overseas holder of American debt — did not release any official statement about the downgrade. A Finance Ministry official said he could not comment.

Though Beijing has few options other than to continue to buy United States Treasury bonds, Chinese officials are clearly concerned that the country’s substantial holdings of American debt, worth at least $1.1 trillion, are being devalued.

If people are not going to put time limits on unemployment, drug test for federal entitlements, review Medicare, Medicaid and social security, and reduce spending overall, there is no reason to ever ask “WE THE PEOPLE” for more money. Of course we should have a safety net for those who actually need it, but its safe to say there are far too many who do not.

The one issue that is never being discussed is JOBS! Newsflash to Washington, imagine the revenue that would be created if Americans were actually working? Tax revenues would increase and federal spending in unemployment compensation would be reduced. If and when that occurs … THOSE REVENUES MUST, AND MUST BE AGREED TO NOW, GO TO PAYING DOWN THE DEBT, NOT CREATING NEW SPENDING PROGRAMS TO BUY VOTES.

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  • Comments

    One Response to “The US has Not Felt the Effects of the First Credit Downgrade … S&P Warns of Second Downgrade”

    1. As the Obama Recession Continues, Down Grade of US Credit rating … Barack Obama Plays Golf | Scared Monkeys on August 7th, 2011 6:33 pm

      [...] For the first time ever under any US President, America’s triple A credit rating was downgraded by S&P. Prior to that the US markets suffered a 500+ point implosion. The unemployment rate continues to by greater than 9% and the GDP is beyond anemic. Now S&P warns that there might be a second downgrade. [...]

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