Last week Obama warned Eric Cantor not to call his bluff, it looks like the top credit agency just called his. It isn’t surprising when you think about it. The official reason S&P gave was that it is making the move because the deficit reduction plan passed by Congress on Tuesday did not go far enough to stabilize the country’s debt situation. It did not help that the very day after the agreement the debt was increased by $238 billion, that Obama had promised an extension of even more unemployment payments and increased
investmentsspending for schools, high speed rail, green jobs, and infrastructure costs. The other shoe to drop is the second S&P action, issuing a “negative outlook” for the future, risking even further downgrades.
Adding insult to injury we also have China scolding us for not being very good capitalists:
China said Friday that debt deals in the United States and in Europe would not be enough to save their economies and “concrete steps” must be taken to rebalance the global economy.
“The only way the Americans have come up with to improve economic growth has been to take on new loans to repay the old ones,” a blistering commentary published on the official Xinhua news agency said.
“To eat May’s grain in April, however, will never be a permanent solution to a problem,” the report said.
Jeez, how embarrassing, next thing they will be lecturing us on the size of our carbon footprint. When they start using biblical characters to rub it in, we are really in trouble, oh crap:
“The current bailouts offered by international bodies such as the EU are in a sense, to ‘rob Peter to pay Paul’,” it said.
Since misery loves company, we could take solace in the fact that most world economies are in the dumper, I mean, at least in North America we are holding our own, right?
The economy rebounded. Between 1995 and 1998, a $36.6 billion deficit turned into a $3 billion surplus. Canada’s debt-to-GDP ratio was cut in half in a decade. Canada now has faster economic growth than America (3.3% in 2010, compared to 2.9% in the U.S.), a lower jobless rate (7.2% in June, when the U.S. rate was 9.2%), a deficit-to-GDP ratio that’s a quarter of ours, and a stronger dollar.
Well, at least we are not Mexico, that something, right?
Mexico’s unemployment rate is now at 4.9 percent, compared with 9.4 percent joblessness in the United States. Thanks for this go straight to our wonderful Community Organizer Barrack Obama.
This is really depressing
Moodys and Fitch (the other ratings agencies) have not followed suit, keeping us at triple A.
As with most bad news (and shady WH deals) they usually are announced on Friday’s, as if no one would notice this.
The optimist in me (the glass half full side) would like to think that this might be the impetus, the kick in the butt, needed to shock those Washington power guys into reality, that their pussy footin’ days are over, but then I hear the WH response, no where in there is ,”Gee, this is serious, we need to hit that reset button, change our whole way of thinking, and do something substantive to address the debt problem”. But, sadly, all we get is a Treasury response that the “system is flawed”, no mea culpas anywhere.