Friday, August 5, 2011

S&P Downgrades U.S. Credit Rating

No surprise here: S&P Downgrades U.S. Credit Rating

We knew this was going to happen: no one can legitimately be surprised that it happened. S&P had essentially told us this would be the result even if we did come up with a reasonable debt plan (which we haven't).

Considering the nauseating display of incompetence by Congress over the FAA crisis, this is a very reasonable action on the part of S&P; they have every reason to be "pessimistic" about the ability of the U.S. to take reasonable action in curbing its debt and its deficits.

Source: http://www.realtor.com/blogs/2011/03/10/did-you-get-denied-for-home-loan/

There is a ray of sunshine: S&P expects to downgrade the U.S. debt rating further in the next two years. Two years to turn our country around. We have the tools, we have the solutions; all we need are the politicians willing to implement them and the citizens who are knowledgeable enough about the issues to vote politicians to office who will actually make meaningful progress to turn this economy around.

But this doesn't matter to me! people will whine.

It does matter, as it affects the ability of the government to borrow money to pay its bills, including its employees. Remember the 74,000 people at the FAA that were furloughed? That's a small example of what would happen if the government couldn't afford to pay its people - all 2.7 million of them (and that's as of Jan 2009, I'm sure the number is larger now). Our economy cannot afford to swallow another 2.7 million unemployed workers, and our local governments are already stretched beyond reason trying to support unemployment benefits and other social services for those who have been out of work. And the 2.7 million employees are just the start; I'm not even talking about all the Social Security benefits for the elderly and disabled. All of those people would suddenly be on their own.

And Congress expects us to sit by and watch as they run our country's good name and good credit through the mud. How many of children, parents, grandparents, aunts and uncles, cousins, neighborhoods, how many are government employees? Do their jobs matter to you? If so, then this downgrade affects you. Do you or anyone you know collect Social Security benefits, or have benefited from mortgage assistance, or have ever drawn from any federal government agency's services? If so, then this should matter to you.

I predict many people in Congress and Wall Street will throw a tantrum over this. Ignore them, the same as you would ignore a 3-year-old who is upset because he couldn't play with his favorite toy. Now is not the time for playing around, not when the lives of current and future citizens are at stake. They are throwing a tantrum to distract you from realizing the truth: they have no interest in actually fixing the problems you care about. The only thing they care about is deepening their pockets and their power in Washington.

Let's stop the descent now. Get the message to your representatives that you want meaningful debate on a progressive consumption tax that would make the tax burden more equal across income levels. Encourage meaningful discussions on value-added taxes that would more accurately tax corporations. Vote for politicians who back universal savings allowance taxes that encourage savings and investment both from families and from business.

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