What does a credit rating downgrade mean to America?

Aug 6

What does a credit rating downgrade mean to America?

To answer the question what does a credit rating downgrade mean to America? The first answer is current president Obama might find it extremely hard to serve a second term in the white house. To be honest as it stands now it doesn’t look like Obama will serve a second term. A credit rating downgrade is scary to Americans and the only good news for America right now is the fact that the United States Dollar still is the worlds reserve currency also you can add the fact that the entire planet is experiencing a recession right now so more than likely this downgrade won’t affect Americans that much.

Possible reasons why the S&P downgraded the U.S credit rating

Personally I blame this one on the tea party. It’s clear to see that tea party wants America and the entire planet to return to a gold standard. Preventing Obama from raising the debt ceiling is the real reason in my opinion that S&P downgraded the United States credit rating. In general even talking about this subject is embarrassing. Like it or not America created the monetary system that we enjoy today and the mere fact that America has been downgraded in a system that it created is embarrassing and frankly I’m disgusted by the Republicans and Democrats right now.

Propaganda is propping up gold and our monetary system is being terrorized by people who clearly don’t understand the reason the gold standard was lifted. I will say this again Gold is nothing more than a shiny piece of metal gold is hoarded and as it stands today gold doesn’t do anything for anyone. Our current world and economy is based on consumption America as it stands now consumes the most and at the same time produces alot of the world’s goods. Yes as it stands now America’s is taking in more than it’s letting out but destroying the monetary system will not fix this problem.

Take the credit rating downgrade as a warning

America’s downgraded credit rating oddly enough couldn’t have happened at a better time. Both Italy and Spain are on the verge of default which will definitely shake up confidence in the Euro. What this means is that AAA downgrade to AA+ won’t look so bad to investors. The truth of the matter is as it stands now Investors have nowhere else to go so the reality is that S&P downgrade means nothing. S&P in my opinion are only trying to protect their brand. As it stands today America is just too important to the world for people to stop investing in it.

Now on the flip side I hope Americans don’t sleep on this issue China is on the rise so is India and it’s only a matter of time before the world starts talking about Brazil. What this downgrade symbolizes is that if America doesn’t smarten up its status in the world might soon be challenged. The games in Washington have got to stop and I have a strong feeling that when all of this dies down a new type of voter will emerge in the United States. What I mean by a new voter is this whole credit rating issue is going to shine a light on the importance of America and its role in the world. I read a lot of books on history and I have this strange feeling that a renaissance in the United States is on its way.

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Possible reasons why the S&P downgraded the U.S credit rating, Take the credit rating downgrade as a warning

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Comments

kerwin

August 6th, 2011 at 11:26 AM

I still dont understand why the US has a AA+ rating. It should be below investment grade. What the federal government should do is stop spending money it does not have.
Steve

August 6th, 2011 at 1:17 PM

I would say lower the corporate tax rate to bring manufacturing jobs back home would be a good start!
Joseph

August 8th, 2011 at 3:53 PM

How can you say that America produces (a lot) of the world’s goods. This simply is not true, it is not American workers producing these goods. We are the inovators of many of the world’s products, however we do not produce (a lot) of these products. They are, in many circumstances American companies that produce their products off shore utilizing foreign workers. This is a huge part of the downfall of our economy. Huge profits for American companies with no benefits to the American economy, dollars and taxes leaving our shores. Our country is being sucked dry by corporate America and their relentless pursuit of profits as well as our spineless politicians who give them what they want. Without production by American workers there is absolutley no way to pay down our national debt. When the day comes that our dollar is not the world reserve currency all of our debt will come home to roost at a much higher interest rate. America is the direct reason why China, India and Brazil’s economy are on the rise. We are our own worse enemy, and I do agree with you as far as our downgrade is concerned, we must take this as a serious warning or we will be in line with other economies.
Steve

August 8th, 2011 at 5:55 PM

@Joseph I hear what you’re saying and thanks for pointing out my grammatical error. If America would lower the corporate tax structure in my opinion this would change the ball game altogether.
As much as I get criticized for this by all my friends I actually think based on the current circumstances devaluing the U.S dollar is genius idea. It’s the main reason why China is screaming for people to leave the U.S dollar as the reserve currency.
Inflation is killing the Chinese who have been purposely devaluing their dollar to wipe out all the business competition WORLDWIDE. China is playing a game of chess with America and the sooner Americans realize this the faster we get out of this mess.
Joseph

August 9th, 2011 at 2:26 PM

Steve, Due to corporate loopholes and deductions our effective corporate tax rate is approximatley 15%. This is far below some of our major competitors scuch as China, Japan and Germany, therefore our current tax rate is a meaningless figure due these tax breaks. We really should be asking why many U.S. corps. pay no taxes at all. General Electric had a 2010 profit of $5.1 Billion and due to our current structure paid $0 taxes. As far as devaluing our currency is concerned. Our government has no choice but to print money to devalue the dollar in order to service our current debt. Everyone is trying to hedge against the sinking dollar, that is reason you are seeing an upward spike in commodity prices. If the dollar sinks low enough we will experience what many coutries have already experienced at the hands of the U.S., our primary assets being bought up by foreigners.
Steve

August 9th, 2011 at 3:53 PM

I should have added we need to end corporate loop holes! We need to bring jobs back home personally I don’t think it’s so much the dollar as it is the laws governing the dollar and business. Personally I would have no problem with business owners paying fewer taxes as long as there manufacturing is operating within the United States. American business owners operating within the United States can’t compete globally. That’s why there are loop holes in the first place, another thing you have to factor in is the foreign tax credit its little things like this that are killing American business owners and destroying the country.

The problem is not the money it’s the fact Washington isn’t being straight forward with the American people. No company wants to pay people for life and No government can afford to pay people for life. The problem with Washington saying that is it won’t equal any votes! That’s one of the reasons I say based on current market conditions and America’s current place in the world devaluing the currency is a genius move. Until a China or any other country for that matter can gain peoples trust America will continue to rule. China is currently America’s only REAL competitor globally and China as it stands now has too many problems for people to trust them in leading the free world.

Now don’t think what I’m saying is that China cannot correct its flaws what I’m saying is America has some time to stall and correct issues. America’s way of life is admired by everyone all across the globe; American influence is felt all across the globe. When countries are in trouble they call on the U.S. Now again I’m not saying this will last forever but based on the fiat money supply that we the United States created we have almost limitless wealth. We can mess it all up however if people globally lose faith and trust in the good ole U.S.A. and the good ole U.S dollar. China with all there rioting are calling for the world to remove the U.S dollar as the world currency, and then you have people like Ron Paul feeding into the Gold rush. Talking about a gold standard is borderline terrorism and anyone talking like that should be looked at as a terrorist threat.

REJECT gold it does nothing for No One to buy gold. Gold has been the destruction for all great nations. If we return to a Gold standard we will be ruled by Gold which in my opinion would be the dumbest thing in modern history. Gold has only worked when a nation had SLAVES research your history people. Gold does not work in a free market based on consumption. Gold posts a risk of deflation and nothing is more destructive than deflation, the reason this happens in a gold based market is because one way or another most of the Gold will find its way into a few hands, when this happens a government and its people will have NO hope of fixing this problem at the point it’s only a matter of time before you see system failure.

America having its primary assets bought up by investors doesn’t scare me that much because America has the right to print money. I think this flies over people’s heads, The Euro and many other currencies cannot do this I mean they can but people won’t invest in those countries because there’s no faith in those countries most of those countries need imports to run their countries effectively. America in reality is self-sufficient actually what I should say is that America could be self-sufficient if it wanted to be. So again my issue goes back to the laws governing American business owners LET AMERICAN BUSINESSES COMPETE globally give them that chance. Not every American wants to sit at home and get fat some of us really want to grow our country and expand our reach in business globally operating in America. Tell the government to give us small business owners the opportunity to compete on a leveled playing field GLOBALLY.

That’s my issue! And in my opinion that’s how we get out of this mess!

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