Posted by Jack
Why the U.S. should be downgraded
The world has lost its faith in the U.S. It no longer deserves to be a Triple-A credit.
This was encapsulated in the nods of agreement that were seen in a packed auditorium at a Washington conference of international bankers on Friday when a visibly angry BlackRock Inc.(BLK) CEO Laurence Fink told the audience that the U.S. is not a “principled nation.”
When men and women who control tens of trillions of dollars in U.S. investments are indicating they’ve lost their faith in America, it goes to the very question of whether the U.S. deserves to be at the center of world finance. So, whether or not Fitch Ratings follows through on the “Negative Watch” status that it placed on its top-notch U.S. rating Tuesday, it’s clear now that the dysfunctional American political system no longer justifies a Triple-A rating from anyone.
It matters not whether the U.S. is actually forced into a devastating default is still an extremely unlikely event. Triple-A credits do not behave like this.
In top-rated countries, politicians do not use instruments like the federal debt ceiling as an extortionist political tool. In allowing that to happen, the U.S. is abrogating its responsibilities as issuer of the world’s reserve currency and as protector of the “risk free rate.”
The seemingly endless rounds of political brinkmanship are bad enough. What makes it worse is that gross government debt stands at an uncomfortably high 109% of GDP, according to International Monetary Fund estimates, while the Congressional Budget Office forecasts that Social Security and Medicare obligations will grow exponentially over the next few decades.
With so much at stake, the U.S. can’t depend on foreign investors to keep rolling over its debts just because the dollar’s reserve-currency status locks them into that trade. It’s no coincidence that Chinese news agency Xinhua ran an op-ed Monday calling for a “de-Americanized world.”
Poor Larry. The worm has turned on him.
Who will hold the leader of the free world, President Obama, and the extremist Democrats responsible for this? Anybody?
Until the Democrats are held to account, as Republicans always are, nothing will change and the light of freedom will slowly extinguish.
Poor Tina. No, nobody will do that.
It’s pretty much unanimous. Boehner is unable to do his job, and will be retired shortly (if they can find somebody nuts enough to take the job, that is).
Cruz has had his photo taken with Palin (a foolish thing to do). What with that and the “Great Green Eggs and Ham Recital”, his prospects for national office have been vastly diminished.
Obama will go down in political history for defending the Executive Branch of the U.S. Government against the whims of elected crazy people.
And Wall Street might possibly think again, before it decides to finance the election of crazy people (in this case, Tea Partiers) to office. Because Wall Street might just possibly have fomented the destruction of the GOP.
Us die-hard ironists would find that all-too-fitting.