Follow Barack Obama prior and during his tenure as the 44th President of the United States. Read about my personal observations along with every day facts as they happen. This blog will only submit factual information about the first black President, now in his 2nd term of office.


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U.S. Credit Rating Downgraded by S&P from AAA to AA+

Sunday, August 7, 2011

Was there a toll to take for the U.S. Congress to take so long in approving the raise in the national debt ceiling. Without a doubt, as the United States has now taken a hit on it's credit rating, as approved by S&P(Standard & Poors) credit rating agency. The United States credit rating has now dropped from a perfect AAA status to AA+. So what are the reasons?

First, the United States proved to the people of the world, that their governing body has problems making correct decisions in a timely matter. The United States now is an embarrassment to the entire free world, as now they join others, like China in a downgrade of their credit rating. The United States held a triple-A rating for nearly 100 years, but on President Obama's watch, it was downgraded.

Second, what was actually approved which seemed to be on an emergency measure since it was approved at the last hour before default, is an amount thta the S&P believes is not substantial for the debts that the U.S. is trying to manage. By the end of 2012, the money will run out, and the United States will do this all over again, in an attempt to approve more money for spending, money that they do not have.

So what does this mean? Well thanks to our wonderful Congress, interest rates should now increase on many platforms. Safe money in the form of simple bonds, will not be considered safe any longer. It should have a domino effect on the U.S. people, but it may take time some time for everyone to realize that because the Congress failed to act on a timely basis, the people will have to bear the consequences.
Their decision not to act in a timely basis didn't affect them, but it affected the simple people. What they accomplished it to protect the rich, and made sure that they will not have their taxes raised, but at the same time, because of their failure to act on time, they have now imposed penalties on the middle and lower class in the form of higher interest rates.

SO who in Congress should be held accountable for the blame for what happened? I am sad to say that all members of Congress, whether they are Republican or Democrat are to blame. It doesn't make a difference on how they voted, but on what they voted on. May Republicans and Democrats alike voted for the bill, and also voted against. All of the Representatives from both Houses of Congress voted on a bill that was not substantial enough to prove to S&P and to the financial markets around the globe that they put in place a bill that would sustain the U.S. in the long haul. The bill doesn't even give the U.S. a chance to turn back their debts in a reasonable time. It also doesn't develop a 'credible' plan to tackle the nation's long-term debt.

It will only be a matter of time for the people of the U.S. to feel the effects of what they had done. Because of their poor handling of this bill, many of the representatives in Congress will now worry about the re-elections. Not only did the Democrats put their own President in a tough spot, they also pushed their chances for re-election to an all time low. Many of the representatives in Congress will not survive.


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