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S&P downgrades United States’ credit rating

August 6, 2011

  In addition to avoiding default we were told by the Obama regime there were two other reasons that a deal to raise the debt ceiling must be reached by August 2nd. The first of those reasons was because the stock market remained volatile and concerns over the nation’s debt and possibly default had the markets spooked and this was causing a sell off, we needed a deal to calm the worries of the stock market. But after the debt deal was signed we watched the market lose over 500 points in one day and over the course of the week the stock market gave back all of the gains earned over the course of this year. The debt deal added to the worries on Wall Street and did not help to ameliorate the concerns over the nation’s debt.

  While the debt deal did nothing to smooth tensions in the stock market at least the deal prevented S&P from downgrading the United States’ AAA credit score, right? Not so fast because S&P called for the United States to find $4 trillion in savings in order to save the AAA rating and this deal fell way short of that number.

  The debt deal managed to find cuts of $1 trillion over ten years, with the likelihood that only $10 billion of these cuts are real cuts, and formed the Super Congress to find an additional $1 trillion in savings in the future–kicking that proverbial can down the road once again.

  So our elected officials knew the number which would be needed to preserve the credit rating of the United States and they still could only get halfway there, and now the credit rating has been downgraded. This means interest rates are going to rise on loans and mortgages, and the money the United States will be allowed to borrow under this new debt deal will cost more in interest. This deal has cost the American taxpayers dearly and is the last thing we needed during this recession.

  Naturally Barack Obama–the economic genius that he is–has tried to deflect the blame by telling S&P that it made a $2 trillion error in their prediction and this deal should have been enough to avoid the downgrade because, after all, he understands this type of accounting better than the professionals at NorthShore Advisory, he is the president after all.

  While Barack Obama won’t take responsibility for being the first president to allow the United States’ credit rating to be downgraded there is only one group of people in this deal who never wavered and who made every attempt at finding the necessary cuts to save the AAA rating and because of this that group of people have been labeled as terrorists by the vice president of the United States.

  Nobody else had the courage to stand up and say “enough is enough” and now we have people like the estimable John Kerry making asinine statement such as the media has the responsibility to not give equal coverage to the only group who truly understands the problem and tried to do something about it.

  Name calling and calls for censorship have abounded since the debt ceiling deal was signed–the Tea Party has been maligned and ridiculed as being stubborn and too driven by principle to compromise for the good of the country. But what this downgrade shows us is that the Tea Party knew what was good for the country, and tried to do it even if it meant losing re-election, while the Democrats and the establishment Republicans were only concerned with their re-election chances and spinning this debate in a manner that made them appear as the true victors in this game.

  The S&P downgrade shows us that there were no victors in this game, only losers, and because nobody in the establishment showed the political courage the Tea Party showed the whole of the American people are the ones who really lost in this debate.

  What will it take before the Washington politicians finally take this issue serious–the total collapse of the United States economy? And even then would they act?

  There is only one way left to solve this problem, and that is to send more people to Washington who will make the tough choices and stand on principle to do the right thing for the country. I am talking about Tea Party candidates, of course, and I think that if nothing else this debate has awakened even more people and has provided them with an insight into the Tea Party candidates that they were not able to see before because of the manner in which the media covered the Tea Party.

  There is a groundswell occurring in this country and people like Joe Biden and John Kerry can sense it and they are worried, hence the name calling and calls for censorship. It is time to downgrade the Washington politicians who got us into this mess in the first place–do we really expect the people who got us into this mess to be able to figure out how to get us out of it?

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19 Comments leave one →
  1. stinkprogress permalink
    August 6, 2011 7:39 am

    It is time to downgrade the Washington politicians who got us into this mess in the first place

    Great line! If Boehner and Mconnell do not put both Rubio and Ryan on the ” unconstitutional” 12 member super congress we need to run a 3rd party.

    Like

    • August 6, 2011 7:10 pm

      Even if Rubio and Ryan are on the committee they will be offset by whichever liberals are put on this committee; I see no possible way any good can come from this.

      Like

  2. August 6, 2011 8:14 am

    Great post, Steve. I disagree with many conservatives that blame the Republicans for not getting a better deal. It may be that the RINOs went along reluctantly, but in the end it was only the Republicans that faced-up to the looming crisis confronting America. If the cut, cap and balance bill that was passed by the House had received serious consideration and passed by the Senate, S&P probably would not have taken the action they did take. The crisis we are facing is no less great than when we were attacked by Japan. Obama and the Democrats have refused to recognize the crisis and instead of uniting in the effort to save America from a pending economic collapse, brought on by decades of “big government” policies of both Parties, they chose to keep playing politics.
    A lot of very bad things can happen in the next year and a half, Steve. So I’m hoping this downgrading of our credit rating will serve as a wake up call to the Democrats. This so-called Super Committee has the opportunity to regain our AAA rating. People need to understand that depending on the world market’s reactions and the perception of how serious this committee is taking their task, our credit rating could be downgraded further.

    Sorry for the rant.

    Like

    • August 6, 2011 7:13 pm

      Thanks Jim, and no need to apologize. The Republicans put forth two proposals which the Senate opposed without debate and we were forced into accepting this bill. It is a shame that Harry Reid didn’t even bring cut, cap, and balance to the floor for a vote and if this blows up in our faces we have Harry Reid to pin the blame on.

      Like

  3. The Georgia Yankee permalink
    August 6, 2011 9:31 am

    So now the US must kowtow to the credit rating agencies? I hear people rant and rave about “unelected bureaucrats” setting US policy; where’s the outrage at faceless myrmidons of the financial industry doing the same? Remember the financial industry’s involvement in getting us to this point in the first place . . . and their willingness to look the other way when it came to rating the quality of those morgage-backed securities they were so willing to hawk.

    And perhaps S&P is making a comment here not about the creditworthiness of the US, but the willingness of ideological zombies to hold that credit hostage for the perception of ideological advantage.

    Take good care and may God bless us all!

    TGY

    Like

    • Otis P. Driftwood permalink
      August 6, 2011 11:55 am

      I agree. Why should we worry what S&P, a McGraw-Hill company, thinks? Who died and left them in charge of our credit rating?

      Like

    • August 6, 2011 7:17 pm

      I agree with you and Otis on principle, but with the Congress giving the president the authority to borrow another $1 trillion is seems to me as if the S&P rating matters no matter how much we wish it didn’t. With whom is the government going to borrow this money? The money must be lent to us by another nation, and whether we like it or not, that nation is going to charge a higher interest rate based on out credit worthiness according to the S&P. It is either that or the government is going to print more money, which will devalue the dollar even more and drive up the price of everything. Either way we lose.

      Like

  4. August 6, 2011 10:02 am

    The same agency that gave a 5 star rating to the Junk that got us into this mess. Now we are like Slovinia and Hungary? I thought the statement they made was highly political and uncalled for. Yes, we need to get our House in order. But I bet a whole lot of folks make a killing on short selling on Monday.

    Like

    • August 6, 2011 11:45 am

      P.S. I heard the guy from the Agency last night on CNN… says Bush tax cuts must go.

      Like

  5. August 6, 2011 12:35 pm

    And now the Daily Beast is bashing S&P and lobbing them in with the Tea Party..Libs keep on bashing yet do NOTHING to fix anything… except,of course, give us Obamacare. IMPEACH.

    Like

    • August 6, 2011 7:19 pm

      The libs are simply ignoring the fact that it is their spending which got us into this mess in the first place and are looking to deflect the blame.

      Like

  6. August 6, 2011 1:43 pm

    Our leaders would have never been able to do something like this, if millions of people were not so apathetic.

    Like

    • August 6, 2011 7:19 pm

      A very good point indeed!

      Like

  7. August 6, 2011 2:44 pm

    Obviously, people are seeing through this deal, as they should. There will be no cuts as long as the Democrats have the White House and Senate. Even the GOP will have to be harassed and pressured into making cuts themselves.

    Like

    • August 6, 2011 7:21 pm

      As long as the establishment remains in power nothing will change and I think you are right, the American people are starting to realize this–2012 will be a pivotal election.

      Like

  8. August 6, 2011 8:43 pm

    Both Moody’s and S&P have been telling us since last freekin’ April that we had to cut $4 trillion in spending in order to save our AAA rating. I guess the President and the others thought they were joking. I can’t imagine why, though, since banker-types are not exactly famous for their hilarity and humor.

    So here we are. We TOLD them cuts were everything!

    Like

    • August 7, 2011 6:36 am

      And now Obama is trying to tell S&P that they must have made a mistake in their accounting? What a joke, he can’t admit that it is partially his fault this happened on his watch.

      Like

  9. August 7, 2011 1:40 am

    I agree with Georgia Yankee and Bunkerville. The S&P was giving a thumbs up to every Mbs that came down the pike. They are every bit as complicit as any of the goons in Washington.

    Be that as it may, their downgrade will influence those that actually do listen to them, and unfortunately, those include significant forces in the financial community.

    Like

  10. August 7, 2011 6:56 am

    Unfortunately when you are borrowing a trillion dollars from a foreign nation they are going to charge you a higher interest rate of your credit score is lower.

    Like

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