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Would a Credit Rating Downgrade Really be a Bad Thing?Bob Collinsworth – Salem-News.com
Would times be tougher? Sure, they would... for a while.
(HARRISVILLE, N.H.) - The two largest and most influential credit rating services in the country are Standard & Poor’s and Moody’s. Both of these organizations have intimated that a credit rating downgrade for the United States is likely whether the debt ceiling is raised by August 2, 2011, or not.
Let us examine this situation: These credit rating agencies and the world have watched the United States borrow and spend like greedy fools for too many years. Over that time, hundreds of billions of dollars have been spent on wars for oil and for political gain. Tens of thousands of lives of both combatants and non-combatants have been lost during those wars. Completely innocent indigenous people . . . our brothers and sisters around the world... have had their lives ripped asunder because of greed and an unquenchable thirst for power. The economies of other countries have been trashed as a direct result of these wars. All the while, the United States has sought to borrow ever more money to sow ever more pain and misery. A dangerous pattern has been established and recognized by many throughout the world and that pattern does not bode well for the world in general.
The world can see clearly that many of the officials elected to govern in the United States are some of the greediest individuals ever to hold elected office anywhere. Many of them selling their favors to the highest bidder like prostitutes on a street-corner. We currently have a President who recently involved us in yet another war and did so without Congressional approval. He has reneged on promise after promise made to the people of the United States and the world. He has supported other countries who openly take part in activities that can only be defined as genocidal. He has surrounded himself with people whose character is questionable at best and placed a known tax cheat in control of the treasury department and the IRS.
The world now sees Congress taking part in one of the poorest orchestrated theatrical endeavors ever presented... the debate on raising the debt ceiling. They see a reluctance to rein-in the insane levels of spending at a direct cost to the poor and the middle-class while protecting the ultra-rich. They see both of the big political parties taking part in a rape of the average taxpayer while fattening the coffers of their largest contributors.
Now let us look at what might happen if our credit rating were to drop from AAA to AA: The interest rate to borrow money would probably increase somewhere between .5 and 1.00 points. This would adversely affect those who seek to borrow money for any reason e.g. students, prospective homeowners, businesses, banks, and Wall Street. It would mean that in order to keep payments on loans down to an affordable level, larger down payments and/or collateral would be necessary. Is that a bad thing? Isn’t this exactly what was done in the generations preceding this most recent round of gluttony?
Besides raising the interest rate to borrow, a drop in our credit rating would also raise the interest rate paid out on investment vehicles. This would certainly help those on fixed incomes... people who have retired due to age and infirmity trying to live on social security and meager savings would likely benefit. Is that a bad thing? Isn’t this exactly what the situation was in the generations preceding the excess that brought us to where we currently sit?
What else might change? Well, we would all have to learn the difference between want and need... exactly as our parents and grandparents did. We might all have to learn to set a bit aside for a “Rainy Day” rather than spending ourselves into oblivion. We might even have to learn to respect and help each other rather than relying on “Big Brother” to make it all go away. We might even learn to recognize GREED when we see it and call it by its proper name, rather than rationalize it. We might learn to examine those running for office and recall any elected official who serves special interests rather than the interests of people of the country and the world. We might begin checking more thoroughly for tax cheats, welfare cheats, and corrupt officials and prosecute them to the fullest extent allowed by law.
Would times be tougher? Sure, they would... for a while. The current abysmal employment situation would continue for some time because nothing meaningful has been done to address the cause of the decline. At some point, however, we would elect real leaders and honest people to populate the Whitehouse and Congress. People trained in business, economics, government, and social work rather than political science. People who recognize that they were elected to work in the best interests of the people of the country and the world. We might even become wise enough to outlaw lobbying and establish strict term limits. We might strictly limit campaign spending rather than donations and even outlaw the political parties behind most of the corruption and underhandedness we currently turn a blind-eye toward.
I am not so sure that being put in our place would be such a bad thing. Actually, I would be inclined to say that it is long overdue and might even be beneficial if our credit rating were dropped from AAA to A... but, that is just my opinion!
_________________________________Writer Robert Collinsworth is an American who isn't hesitant to talk about the good side of his country, and that is a welcome thing in this day and age. Salem-News.com admittedly, is very critical of both American politics, as well as those of other nations that we perceive is being wrong in their motives and actions. At the same time, within these structures we criticize, are many outstanding people who make each day a better place for all those around them. They embody and personify the American spirit that is sometimes fleeting, but always present.
These are some of the things Robert takes into account when writing commentary that is designed reach people, to "get them thinking" in his words, and indeed it does. Salem-News.com's goal is for all people to be on the same page, we appreciate Bob's more conservative approach toward that same goal."
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