Via As A Mom
After the markets closed on Friday, Standard & Poor’s made the widely expected and appropriate announcement that they were lowering the credit rating of the United States to AA+ and sustained its negative future outlook.
No big surprise. If my family had an income of $100,000 and spent $142,000 year after year, borrowing the difference, I wouldn’t expect to maintain an 820 credit score. Pretty basic stuff. And if the credit agencies had the manpower to monitor my wife and me and surmised that my income stream outlook was at best flat, that we had no intention of moderating our spending or borrowing, and had a few kids ready to enter college in the near term, that credit bureau would shred every credit card I possessed.
That’s where the U.S. is today. Growth in GDP is essentially flat, spending continues on the rise, and ‘the college bound kids’ are the baby boomers retiring and entering the Medicare and Social Security rolls at a 10,000 a day clip.
So S&P looked at the landscape and said the U.S. is less credit worthy. Duh. And that AA+ won’t last long – future downgrades will be in the offing unless the fiscal policy gridlock breaks. I don’t see that happening anytime before the seating of the 45th president in January 2013 – I hope I’m wrong.
Unprecedented has become an all too familiar word in the past few years. Unprecedented spending, debt, bailouts, regulations, market interventions – you name it, we’ve done it. If you developed a road map showing you how to crash an economy, stranglehold business, and dishearten a people, we have followed it at every turn. Read more…