Hard on the heels of downgrading the United States’ credit rating from AAA to AA+, credit rating agency Standard & Poor’s lowered the credit ratings for Fannie Mae and Freddie Mac.
Friday’s downgrade means the United States is no longer considered among the safest financial risks in the world. Despite raising the debt ceiling, which Obama vowed would help America discharge its debts, S&P still downgraded our country’s financial rating. A steep drop in the stock market on Friday and another anxious day today, with a 300 point drop this morning, does nothing to allay anyone’s fears for the U.S. economy.
David Beers, global head of sovereign and international public finance ratings at S&P, told Fox News Sunday that governments and Congresses come and go, but spending on entitlements persistently drags U.S. debt further into the red.
“The key thing is, yes, entitlement reform is important because entitlements are the biggest component of spending, and the part of spending where the cost pressures are greatest,” Beers said.
Beers said he faults both Congress and the Obama administration for “the difficulty of all sides in finding a consensus around fiscal policy choices,” but any agreement must command the support from both political parties in order to be durable.
As it lowered the U.S. outlook on Friday evening, S&P said that political gridlock has prevented the U.S. from reaching a workable solution to its financial difficulties. Last week’s agreement to reduce the nation’s debt by at least $2.1 trillion over the next 10 years “fell well short” of comprehensive reforms that some had advocated, the ratings agency noted.
S&P foresees the select congressional committee to be organized to find additional savings will likely avoid raising taxes or doing any significant entitlement reform.
“It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability,” S&P announcement reads.
S&P’s forecast of Congressional reluctance to raise taxes is fodder to the Democrats’ and particularly John Kerry’s “Tea Party Downgrade” talking points. Liberals are well-known for their selective hearing. Like adolescents, they clasped their hands over their ears and eyes when the Tea Parties demanded not one but three things – no new taxes, spending cuts, and limited government.
Right now, the Federal debt per citizen is $46,760. The debt per citizen is $130,363. That means the average citizen is supporting two other children. While that generally means their own children, with double incomes and smaller, modern families, the average family is still supporting two other people.
A taxpayer making $60k a year would have to donate their income for two full years in order to pay off “their share” of the federal debt, as well as those other two people they’re carrying on their back. To pay it off over a ten-year period, they would have to submit $13,000 of their income per year on the principal alone, not counting interest, and the U.S. debt is already overblown due to interest charges. We’re nowhere near paying off our principal as a country.
But the Progressives and John Kerry want to hang this fiscal malfeasance around the necks of the Tea Party. He expects us to print out buttons that read: “Tea Party Downgrade.” We’re more likely to print out a button that says: “Read Reckless Endangerment”. S&P apparently did, or realizes that at least one person in the Tea Party has read that book, and got its act together and not only downgraded the United States but its dependents, Fannie Mae and Freddie Mac.
The downgrade sent a direct message to the United States: reform the entitlements. The other two credit agency culprits, Moody’s and Fitch’s, are still on the side of the government fat cats. According to the Cato Institute, a number of small ratings agencies warned of the impending 2008 meltdown but no one listened to them.
Welcome to the Tea Party, little credit agencies.
MoveOn.org is planning a “raid” on a Tea Party meeting this Wednesday in Scotch Plains, N.J. They must be really unnerved to carry on this way. They managed to bully the Republican House of Representatives to sign onto their diabolical debt ceiling deal. Apparently, absolutely no dissent is to be tolerated in our new socialist world.
Once you read Reckless Endangerment, Tea Partiers, take a look at Walter Lippman’s Public Opinion and Edward Bernays’ Propaganda. The Progressives don’t want us to read. They want us to remain ignorant and uneducated, while they establish themselves as the educated elite, making decisions for us. Yeah, right.
That should sound as a klaxon alarm to all Tea Party activists: Get thee to thy library (or e-reader)! Like Minds: see you at the EEMPL on Wednesday! And bring your e-readers.