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DOWNGRADE OF AMERICA'S CREDIT RATING.

Updated on August 6, 2011

Should it have happened?

The downgrade of the United States credit rating by Standard and Poor's is not surprising; but it is a hurting experience for it to happen at this present time, when the economy is still struggling in a slow growth recession.

It should not have happened, but for the foolhardiness of politicians, who were told of the consequences of the U.S. Congress not raising the debt ceiling on time and without any fuss in doing so.

The process of raising the debt ceiling has taken place on several occasions, with very little opposition for the government to pay its debts to cover its military expenditure and other appropriations by Congress.

Yet, the processing took an unprecedented beating, with an unnecessary debate, led by members of the Republican Party, who tangled it with proposals designed to inflict huge cuts on social and entitlement programs to deal with the nation's deficit reduction. They had made that a condition to allow any debt limit increase.

The Obama government disagreed by saying that revenues from businesses and private individuals must also be forthcoming, as cutting down on social and entitlement programs that the Democratic Party felt so strongly about alone would not produce a balanced approach toward any deficit reduction.

The behavior of Congress placed the whole world on edge, including the overall global financial and business sector. Big corporations and financial institutions were not able to determine where the American economy would eventually end up.

The government would be hard pressed for money and it would default for the first time in history, if its fiscal obligations were not met.

However, the argument finally subsided, and President Barack Obama signed a bill by Congress into law to relieve the country from a political choke hold by the Republican Party, through the influence of its Tea Party members.

The downgrading of the country's credit rating would affect the economy in many unfavorable ways. Interest rates would soar and loans of all kinds would be hard to come by; but most of all, the price of consumer goods would plummet, causing the cost of living to go up for the average person and his or her family.

The situation has come about, solely because some politicians would do what they felt was in their own best interest and not that of the people who voted for them; and that should be a lesson for all Americans.

The budget crisis would not have happened any other way; but for the stubbornness of some members in Congress, who thought that party ideology was more important than the country's needs. They deliberately failed to pay any attention to what many economists were saying, that taking the country down the unenviable path of default was not the right thing to do. It would only create economic difficulties all around.

However, they went ahead and did that anyway; hence, the downgrade of America's credit worthiness. Therefore, independent voters, particularly, should know where or for whom to cast their votes from now on.

"A word to the wise is enough.".

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    • FitnezzJim profile image

      FitnezzJim 

      7 years ago from Fredericksburg, Virginia

      Good Hub., except ....

      If the followup news I'm seeing has any truth to it, then the downgrade should be firmly and resoundling placed at the doorstep of the analyst that made the Two-Trillion Dollar mistake.

      In the mean-time, let the politically inclined finger-pointers and name-callers do their thing. It's far more entertaining than seeking the truth of the matter anyway.

      If it is a mistake, we'll be seeing folks go down big-time for manipulating the market.

    • profile image

      Howard Schneider 

      7 years ago from Parsippany, New Jersey

      You are right. This credit downgrade should all be placed at the doorstep of the Tea Party Republicans in the House. The main culprit is Majority Leader Eric Cantor. He should be arrested for treason. A deal was close until he cut Speaker Boehner's legs out from under him 2 or 3 weeks before the deadline. Of course the GOP will lambast the President for this. The President compromised at every turn. Great Hub.

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