Post
Topic
Board Economics
Re: 8/8/11 and the big "meh"
by
miscreanity
on 11/08/2011, 02:16:42 UTC
So you're saying that the US credit rating got downgraded due to the one political faction in America that is actually the most vocal about debt reduction? And then you compare the entire faction to a potato - ignoring the probably reality that such a large group is necessarily composed of people from a wide range of intelligence, background, and character?

The US credit rating got downgraded because the US is not credit worthy. It's pretty simple. The downgrade should have happened long ago, actually. The amount of debt carried by the US Federal Government cannot mathematically be paid back without printing the money to do so (which they've already started doing via "quantitative easing").

You seem to suggest that the creditworthiness of the country would be improved if the group advocating for "smaller government, less spending" was gone, thereby leaving more people who support higher spending levels? Perhaps you want to rethink your opinion on this.

I think the political element is irrelevant as well - the dog and pony show that entertains and distracts while reckoning is delayed.

A major aspect of the downgrade by S&P could also be that the rating agencies have been in the spotlight recently and in danger of being declared pointless for having waited so long after the obvious to take action. This could have been an effort to regain some semblance of validity in the eyes of the financial community despite being too little, too late.

In doing so, S&P has pissed off government and I have to wonder whether further downgrades of the US among the rating agencies will run the risk of nationalization in some form. As absurd as it sounds, I wouldn't put anything past a desperate politician.