For the past two months, all we heard is that Congress had to pass the debt deal and raise the debt ceiling to avoid default and to prevent the US credit rating from being lowered.
Guess what? Even though a debt plan and raising of the debt ceiling was approved, the US’s credit rating was still lowered on Friday. Standard and Poors cut the nation’s AAA rating down to AA-plus.
S&P seems to have seen the new debt plan for what everyone else is seeing it as – worthless and completely ineffective in reducing spending or the national debt. Part of their statement on Friday read:
“The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics”
In a time when the US economy is in the tanks already, this will undoubtedly result in higher interest rates for mortgages, credit cards and bank loans. This is going to have a direct impact on personal spending, businesses and jobs. This can only add to the likelihood of another recession (that is if we ever really left the last recession).
Because both Republicans and Democrats did not have the cajonies to make the necessary cuts in federal spending, S&P had no choice but to take the action they have taken.
Voters across the nation need to vote out every Senator and Representative, Democrat or Republican, that voted for the approved debt plan and replace them with men and women who have the fiscal integrity to make the necessary budget cuts to get the feds back on track.