The deep and fundamental flaws aren't with S&P, they're with a government that simply can't stop spending money like a drunken sailor.
Did you see how they fixed the FAA stalemate on Friday? Yes, it needed to be fixed, but the solution was taken stratight from the Bizarro World. The Democrats agreed to Republican demands that we stop subsidizing thirteen small micro-airports that only handle one or two flights a day in some cases. The Republicans then gave in to Democrat's demands that the Secretary of Transportation be allowed to administratively reinstate those subsidies.
Then they all went around praising bi-partisanship and patting each other on the back. This was a great compromise to those who can easily lie to themselves.
We DESERVE this downgrade. I saw problems two years ago and stopped buying government bonds at that time. Forbes magazine ran an excellent article in the Summer of 2009 warning of out-of-control spending. We will now see interest rates start rising across the entire economy. Of course, Monday will be interesting in the both the bond and stock markets.
Since the political backbone to cut spending isn't present in the majority of Washington, we have only two ways out of this incredible hole we have dug: We simply accept a devaluation of our currency, sparking massive hyperinflation, or we return to pre-Reagan, Draconian levels of taxing income. Nobody wants to see either, but just as a drug addict doesn't want to lose his job, his home and his family, his addiction leads him to that end. Unless we get entitlement spending substantially reduced, we are going to lose everything. We will follow Rome, the Holy Roman Empire, the Third Reich, and the Soviet Union into history's dust bin.
Five years ago I believed that the United States would fall in my grandchildrens' lifetimes. Then I started to worry about it failing during my daughters' lifetime. I'm no longer betting that it won't expire before I do.
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