Do They Think We’re Stupid?

This weekend Standard and Poor’s (S&P) downgraded the credit rating of our country from an AAA to an AA+. Then last night I read that a white house advisor blamed the tea party for the downgrade.

I’ve had it with politicians who are more focused on blaming the other guys than trying to fix the problems of our great nation! I have a hunch that I’m not alone.

From what I’ve observed, S&P warned us during the debt ceiling debate that we needed to reduce our deficit spending and start reducing the debt we have accumulated. The debt ceiling agreement did little immediately other than raise the debt ceiling, but did do two things later. We punted the issue from our elected officials to a “special” commission to figure things out later, and much of the advertised cuts are down the road where they may or may not actually happen.

After watching the NFL players and owners, with conflicting goals, find a workable solution that allowed the season to begin, I find the destructive antics being played by many politicians to be unbelievable.

Grange members in their personal lives and as members making decisions for their organization understand that we can’t spend more than we take in without risking our future. We understand that if you only have enough money to buy milk for your kids, you don’t buy pie instead. We understand that if you don’t have money to pay the credit card bill, you don’t use the card.

I don’t know what the repercussions of the downgrade will be, but I do know it is not going to make our situation better and it may make life harder for every American. Hearing the S&P is still warning that they may yet reduce our rating further and that other rating organizations are reviewing our status, should wake up the folks in Washington, D.C.

I wonder how many politicians are listening to us? Are we stupid to think that our elected officials should find ways to reduce spending and debt? No one thinks it will be easy, but these elected officials asked us for the opportunity to serve our country.

To each politician I say, the parties didn’t elect you, we did. If you think we’re stupid, we can fix that a year from November. At least we can balance a check book.

S&P Ratings and the Debt

Yesterday the Standard and Poor’s Rating agency (S&P) warned again that the credit rating of the US could be downgraded unless we resolve the credit ceiling issue and start reducing the debt. I then heard the President hold a press conference and blame the other guys for not having a fair and balanced plan.

The reality of a downgrade of the US credit rating would probably not be good. While I’m not sure what may or may not happen, common sense says that one big impact would be that borrowing money would cost more. The lower your rating, the bigger the risk to the people loaning you money and the more interest they want to assume that risk. If the government pays more, so will we the people.

In 2010, net interest outlays totaled $197 billion due to lower interest rates. The scary thing is the Congressional Budget Office (CBO) projects (Dec, 2010) that, under current law, the combination of rising debt and rising interest rates will cause net interest payments to balloon to nearly $800 billion by 2020. If the current amount doesn’t worry you, nearing a trillion dollars in less than 10 years should. And when you consider that it seems the CBO always underestimates the cost of government over time, maybe we should be a little frightened?

Fair and balanced is a point of view. I remember a tax increase in the 1990’s where the President said we were only going to tax the rich. When my taxes went up that year, I realized that the President and I had a different view of what rich meant. While I thought I was rich in friends and family and yet had to struggle to pay my bills, the law increasing taxes on the rich caught me in the net as well.

I keep thinking that the current debt situation is because of the spending our government has been doing. All my life I’ve heard people point out stupid things that the government spends money on. When you think about the attitude of “if we don’t spend it, we won’t get it next year” it does make sense how it happens. However if we can’t find ways to cut the federal budget, oh yeah, that is another problem since Congress has not passed one in a while.

Political posturing is not the answer for the debt or economy. It only matters for elections and I'm not worried about elections next year when S&P ratings this year could harm our economy and future.

What I want is a growing economy so people can go back to work and pursue their version of the American dream. As I look around the world and back at history, I am having trouble finding a country, a company, or even a person who spent themselves into prosperity. The obvious first step to me is that our nation needs to reduce its debt. It seems only fair to me that we reduce spending first, and start now.