Standard & Poor’s downgrading of the United States’ credit rating, from AAA to AA+, is an embarrassment to our country — but it is a lot more than that.
The downgrade is a tangible reminder that our profligate spending and borrowing ways have yielded some of our sovereignty over our own affairs to others — be they ratings agency analysts, or bond traders, or foreign governments that hold large chunks of our debt. When you borrow money, you inevitably give your creditors an element of power over your affairs. They can raise your interest rate payments or tell you you can’t buy that new car. Our staggering federal debt is giving entities like Standard & Poor’s or countries like China the ability to set their own benchmarks for our performance and to threaten further downgrades or higher interest rates if those benchmarks aren’t met. These developments should be deeply troubling to anyone who is paying attention.
I’m afraid that the downgrade also will be another example our government’s ostrich-like ways. Downgrades and higher interest rates are an entirely predictable result of our spendthrift budgeting, but those consequences were ignored. We can hope that, with the shock of a downgrade, our government will start to behave responsibly — but so far the signs aren’t good. Our Treasury Secretary argues that Standard & Poor’s got its math wrong, and our political leaders are just blaming each other for the problem. Senator John Kerry — that well-known paragon of balanced budgeting and fiscal responsibility — even goes so far as to call it the “Tea Party downgrade,” as if the brand-new legislators who were elected on a platform of reduced spending and who insisted that the recent debt ceiling increase include some spending reductions were responsible for our trillions of dollars in accumulated debt.
We are not only burdened with unsustainable debt, but also with an inept gaggle of “leaders” who view every crisis as just another opportunity for political spin.