There is no short fall of opinion from constituents on their elected representatives constant bickering and political positioning throughout this debt crisis. That said, I have not heard a whole lot criticizing Standard and Poor’s for their irresponsible downgrade of US Debt. (Not their first hiccup mind you- Many can argue S&P and Moody’s themselves caused the cashpocolypse to begin with, with their uneducated ratings of mortgage bond securities)
Call me blind, uninformed or perhaps ignorant to the simple mathematics of the issue at hand. That is all fine. My contention is pure and simple. The US was never at risk of default and the downgrade is ridiculous. Sure there are issues with the seemingly uncontrollable fiscal debt of our nation. But are we really going to sit here and pretend that such cant be reversed quite easily? And moreover that this country was ever at risk of default? Yes, certain revenue generators (tax hikes) would cause hardship to certain segments of our population. And of course the same is true by cutting budgets on certain government programs. However, a hybrid of the two will be paramount to eliminating this path that we are on. So what gives, which party will get their way? That is the only issue.
We can all agree that the U.S. has a long-term and unsustainable fiscal position, everyone knows this. Both the president and congress understand this. The real issue is getting our representatives to come together to deal with it. Hopefully the American publics disdain for what has gone on in D.C. will force congress to put the economy ahead of politics and actually face the challenges facing the country and stop playing political games back and forth. My point is this country was never at risk. S&P blew it again in an attempt to make a point, whatever that point may be. Perhaps resurrect their reputation?
I am very curious to see how the markets open tomorrow and more specifically how US Treasuries and the bond markets react. Will mortgage rates spike? Who knows. But this news is certainly now what was needed to help the US housing market in anyway. Yikes. Stand by…
Great interview below of interview with Treasury Secretary Timothy Geithner who lets S&P know his surprise in their recent downgrade…
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