An event of historic proportions!
What does that mean? It means it has never happened before in the history of our nation. The United States of America sustained its AAA credit rating, the highest possible, all through the Great Depression, two World Wars, Korea, Vietnam, Hurricane Katrina, Lady GaGa, and the Gulf Oil Spill. But it couldn’t survive the Obama administration’s financial program. Its credit standing just got downgraded to AA+. This commonsense conservative wants some answers!
We all know the feeling. There are three national credit rating institutions that affect us personally. Equifax, Experian, and TransUnion are the independent agencies that give each of us a Credit Score, ranging from 300 to 850.
Anything above 700 means our credit is good, and banks will lend us money at the lowest going rate. Anything below 450 means that we have shown ourselves to be financially irresponsible, and banks won’t trust us with their money. Ratings in between will determine how much money can be borrowed, and what interest rates will be charged.
The same thing has just happened with the United States of America.
The three international credit rating firms that judge the credibility of businesses and nations are Standard and Poors, Moody’s, and the Fitch Group. Standard and Poor’s has just downgraded the US Treasury’s credit rating, plus that of the two primary quasi-governmental mortgage underwriting organizations, Fannie Mae and Freddy Mac, from AAA to AA+. Moody’s has put the US of A on notice that their
downgraded rating may be pending, and the Fitch Group says they will issue
their report within the month.
Since he was first elected, President Obama has routinely blamed his
irresponsibility on everything from the George Bush Administration, to OPEC oil
prices, to the Japanese earthquake and tsunami.
Some of that may be justified, but one thing the Obama Adminstration did
inherit from the Bush Administration was a top-rated AAA credit rating. But no more.
So what has been the reaction of President Obama, since he is the first president in history to have the nation’s credit worthiness downgraded under his watch? Well, the first thing he did was to try to shoot the messenger, Standard and Poor, accusing them of having made a $2 trillion error in their calculations. They quickly refuted that accusation, and stood solidly behind their downgraded rating. Next he blamed the Tea Party for having opposed his call for increasing the nation’s debt limit with a “clean bill,” which meant no commensurate reduction in government spending. But the Tea Party was the only
group pushing to reduce the runaway government spending that caused the downgrading. It is now generally accepted that had it not been for the Tea Party, Standard and Poors would have probably downgraded the US to an even lower BBB rating.
True to his fashion, the President commanded the airwaves to talk about the problem for which he was in no way accountable. Even though he was 55
minutes late in making his nationwide TV appearance, the best his writers could
come up with was to state that the United States of America has always been a
“AAA” nation, would continue to be a “AAA” nation, and no irresponsible agency’s
rating could ever make it otherwise. The investment community greeted his optimism
by dropping the DJIA another 200 points while he spoke, and 635 for the day.
So while the nation and the world waited in anticipation, what action did President Obama undertake to solve this historic problem? He immediately left the White House for two Washington area fundraisers for the Obama Victory Fund, at a ticket price $15,000 per
This Commonsense Conservative is beginning to believe that’s the only kind of financing he can understand!