Welcome to the Party

I'm sure every single member of American society feels overwhelmed with news of the debt ceiling.  We have the Democrats on the left side stirring the pot about how if we don't raise the debt ceiling that we will default and there will be ominous consequences.  Barack Obama has even said in no uncertain terms that he isn't sure the federal government will be able to send out all those Social Security checks that the good citizens rely on after August 2 if the debt ceiling isn't raised substantially.  There's been so much pandering to the AARP sect of voters that I'm starting to wonder if another block of voters even exists.  One of the big scare tactics from the left is that if the USA defaults then our creditworthiness (Is that really a word? It just feels weird.) will be damaged irreparably which will then cause our already fragile economy to tumble into a double dip recession or even a depression.  We have the Republicans on the right (but probably not correct) side of the aisle that seem to be somewhat divided.  Apparently some on the right including Senate Minority leader Mitch McConnell are willing to hand over free reign of raising the debt ceiling to Barack Obama and his cronies.  We have another more ardent faction including most of the freshman House Republicans and most notably Rand Paul in the Senate that have been preaching big time cuts and a balanced budget amendment primarily but also seem willing to raise the debt ceiling if that will be enough to coerce the Democrats into agreeing to the Cap, Cut and Balance plan they have forwarded.

Lost in the shuffle among all this banter were what I found to be two of the most important pieces of information that could help point us in the direction of making the correct (not right) decision.  Standard and Poor's [1] recently warned that the good ol' USA is in real jeopardy of being downgraded from AAA to a lowly AA rating on their system.  Basically, they seem to imply that this is inevitable by warning that raising the debt ceiling will damage the rating and not cutting back on spending will also damage the rating.  Since NOT raising the debt ceiling AND cutting back on spending isn't even being seriously considered in ANY of the discussions it would seem that a credit downgrade is not only possible but absolutely inevitable.

Following up the S&P news was a release from Moody's [2] that they too are strongly considering a downgrade of US creditworthiness.  (Sorry, but the full Moody's report is available [3] for pay and in these difficult economic times I can't afford it and am forced to rely on second hand information)  They seem more confident that the debt ceiling will be raised but seem to imply they have little faith that the politicians will make sizable enough cuts to impact the real problem which is out of control spending.

I hate to say "I told you so" (actually I love it) but Libertarians and more recently Tea Party members have been preaching this mantra of balancing the budget and maintaining some semblance of fiscal responsibility for quite some time.  I know the Tea Party gets a bad rap in the news frequently and I think in a lot of cases that that bad rap isn't exactly without cause due to the fact that the Tea Party has unfortunately attracted a small number of fringe personalities that damage and marginalize the real beliefs and mission of the group.  However, I do admire the Libertarian fundamentals that the group espouses.  Unfortunately, I believe that both the Democrats and Republicans are a little late to the Party and won't be able to make any meaningful impact on the political machine in DC.  It may indeed be too late to avoid a downgrade of the US credit rating but it is not too late to replace the lousy politicians we currently have with some new ones that will be willing to stand up and do the right thing which is reel in the out of control spending and restore fiscal sanity in our federal government.  I believe this has already started with the 2010 elections and I also strongly believe that Americans have finally awakened to this reality and will continue to replace the business as usual politicians including Barack Obama in 2012.  We may not be able to avoid a double dip recession or even a depression but we are definitely not too late to save this great republic.

[1]  http://www.standardandpoors.com/ratings/articles/en/us/?assetID=1245315237257

[2]  http://thehill.com/blogs/on-the-money/801-economy/174447-moodys-neither-plan-protects-the-nations-aaa-rating

[3]  http://www.moodys.com/