Is there anybody who hasn’t seen today’s headlines screaming about the debt ceiling? It’s totally frustrating that even with President Obama signing the new law, we still suffer the shameful stigma of our credit rating’s reduction from AAA to AA+. Standard & Poor took a full 72 hours to reach this decision; and the wonks at this credit rating agency--the only one of three American agencies to downgrade our rating--have given too much thought to matters that don’t concern them.
After all, what right does Standard & Poor have to point fingers at our politicians for poor policy making? Isn’t that rather poor policy making on the part of Standard & Poor? It seems this decision was based largely on their perception that our politicians don’t exactly get along. However did they get that idea!
CNN’s Wire Staff, on the CNN website late on August 5, 2011, posted an item called Obama Official Calls Credit Analysis Rating ‘Way Off’, in which Standard & Poor’s head of sovereign ratings (that sounds so grandiloquent, he must be something like a Grand Poo-bah) stated the rating reduction resulted from “political risks [and] rising debt burden."
Well, besides the spectacle of our politicians frolicking unmerrily through unproductive July sessions, there is the little matter that our legislators, realizing in May that we had already reached the debt ceiling, removed two liabilities from the nation’s balance sheet, thus creating a false positive balance on the side of assets. This was done to keep people happy prior to the August 2 deadline; I guess whoever did this figured, “Who will ever know?" However, once the House approved the new debt ceiling, the liabilities were returned to the balance sheet, thus throwing our debt-to-GDP ratio in excess of 100%. When I explained this to my daughter, she blurted out, “You mean we’re not making any money?" Yup, that’s right, we’re not.