click for the S&P report
The historic downgrading of The United States of America by the Standard & Poor’s credit rating could be attributed to stricter guidelines implemented in response to Congressional investigations.
The investigations have uncovered concerted efforts to boost S&P corporate earnings by promoting the mortgage industry profit machine of banks and investment houses. Over 90 percent of the AAA ratings given in 2006 and 2007 to mortgage-backed securities have been downgraded to junk status, but only after record profits were recorded for the rating agencies…. And trillions spent on an economic bail out
Now the same rating agency that promoted those AAA investments has downgraded the United States of America, basically because our political leaders bicker.
The report, a brief 7 pages, spends an inordinate amount of time discussing a lack of faith in the American political machine. It is not the process that is the problem, but the people; and Standard & Poor’s is laying the blame for America’s downgrade at the feet of the Republicans in the House of Representatives.
“We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act.”
Standard & Poor’s, regardless of investigations questioning their objectivity and credibility, continue to hold immense influence over the trajectory of the American economy. Their report threatens further downgrades, and has inspired China to scold America on it’s fiscal debt policies.
The S&P report expects the government to cut spending, but basically demands an increase in revenue: a.k.a, increase taxes. The question for Congress then becomes, who’s pocket will that money come from.
The recession has left middle class workers and small business owners in a pool of stagnation with incomes stalling or dropping, but corporations have continued to see profits increase with some major industries reporting record profits.
In 1915, in the days of the Rockefellers and the Carnegies, the richest 1% of Americans earned approximately 18% of all income. Today, the top 1% account for 24% of all income.
This continued disparity in income, combined with the loose restrictions on campaign finance, are a direct and immediate threat to American democracy according to former Federal Reserve Chairman Alan Greenspan. “As I’ve often said, this is not the type of thing which a democratic society – a capitalist democratic society – can really accept without addressing.”
But, if the S&P report is to be addressed, someone will need to give more.
The S&P report is relatively brief, and readers are encouraged to review it themselves.
I think both parties are at fault. Rather than do what’s best for the American people, they focus on doing what’s best for their chances in the next election. Both are slaves to their party bosses and campaign donors.