US Deserves Credit Downgrade

I honestly don't understand what the huge deal is about a downgrade in the US credit rating. Yes, I know it would raise the interest rates (and hence the payments) on our national debt, but that doesn't change the fact that our government has earned a downgrade in our credit rating.

Look at it this way. Almost half of what we're spending this year is borrowed money. Our national debt is $14.3 trillion. That's equivalent to $46,000 for every man, woman, and child in this country. If you're just counting taxpayers, it's equivalent to $130,000 per taxpayer. Households? How about $175,000 per household?

We're deeply in debt, borrowing almost half of what we spend each year, and are in the process of establishing new entitlement programs, taxes, and regulations on businesses that will further depress our economy and accelerate our slide into debt. Each and every day brings us closer and closer to a Greek-style debt crisis that can't be avoided as long as we keep racking up more and more debt.

So, why should Moody's and S&P keep our credit rating at AAA? Does anybody think our nation DESERVES that credit rating? Personally, I think the President and Congress have been working hard to put this nation in a position where exactly this would happen, and they have little room to complain when what they have worked so hard to achieve actually happens.

I believe our credit rating will be downgraded within the next few years whether or not we raise the debt ceiling today. Why? Because the underlying problem isn't the debt ceiling itself, it's the massive amount of borrowing we are doing that has to be addressed. And that means spending cuts.


We hear Republicans and Democrats talk about "massive" spending cuts in the amount of $4 trillion... over the next decade. Excuse me, but that's garbage. When they talk about "cutting" debt by $4 trillion over the next decade, they don't mean it the way you or I would. They mean they would cut $4 trillion of PLANNED spending from the next decade, leaving the budget to increase a good $5 trillion over that time period.

In other words, even if those $4 trillion in cuts materialized exactly as planned (not a foregone conclusion), our national debt would continue to climb each and every year.

You want massive cuts? Okay, here are the numbers of what we MUST achieve in order to start reducing our national debt.

We have a deficit this year of $1.4 trillion out of a roughly $3.4 trillion budget... meaning that tax revenues will handle about $2 trillion of that, and the rest is borrowed. In order to start reducing our national debt, we have to balance the budget. That means we have to cut spending by $1.4 trillion. Today. Or, if you insist on looking at it the way that politicians do, we must reduce spending by $14 trillion over the next decade.

As you can see, the "massive spending cuts" being considered are less than a third of what are needed.

So, in my humble opinion, Moody's and S&P should have downgraded our credit rating a while back. That they're considering doing so now isn't so much unexpected or unfair as it is harsh reality coming home to roost.