by John Hawkins | August 8, 2011 8:05 am
Losing our AAA credit rating is a historic disaster for America. It will cost us investment dollars, weaken our already anemic economic growth, and it’ll mean billions in higher interest rates — and it’s entirely possible that it will be a historic negative turning point for the country. In other words, the country may be on the back side of the mountain and going downhill from here for a long, long time.
However, as with most dark clouds, there may be a silver lining. It relates to an old saying about our country, “America can choke on a gnat, but it swallows tigers whole.” Put another way, we tend, as a people, to bog down in dealing with even obvious or simple challenges. But, when things get serious and the time comes to act, we can go from splashing in the kiddie pool to creating a tidal wave in a relatively short period of time.
In the case of debt, it has been clear for a long time that our government was writing checks that our country’s behind was never going to be able to cash. But, the flip side of that was that fixing the problem was politically difficult. The American people DON’T WANT to hear the truth — which is that the government has made a lot of promises to them about Medicare and Social Security that it’s not going to be able keep.
Still, although anyone who could do math could see the problem and even though the Tea Party finally got alarmed enough to start taking to the streets after Obama dramatically escalated the government’s spending in 2009, the American people were still largely lethargic.
Sure, they could do the math just as well as the Tea Partiers, but most human beings prefer living a comfortable lie to dealing with a harsh truth. It was just easier to sit back, say “nothing’s happened yet,” and hope that somehow, some way, somebody else would take care of the issue.
Well now, we have the first concrete piece of evidence that most people have seen that, yes, there are huge consequences to believing we can spend much more money than we’re taking in forever. For the first time since 1917, America has lost its AAA credit rating.
This has caused the Democrats to mount a smear campaign against S&P for being the first major agency to tell the truth about the state of America’s finances. This is understandable from their perspective because this will be a major campaign issue in next year’s presidential election and it will be the counter to every Democratic cry for higher spending from now until doomsday: “We’ve already lost our AAA rating; so we need to cut spending, not raise it even more!” This is also the real world outside of politics rendering its verdict, which is a direct confirmation of everything conservative Republicans have been saying about spending since 2009 and a direct refutation of the Left’s line, which is “We can afford to spend more because all is well!”
Some people, understandably, are going to be thrilled with the potential political ramifications of this, but the more important point, and the real silver lining, is that this is a shot across the bow that will hopefully make the American people realize that we can’t go on like this. We HAVE TO cut spending and WE HAVE TO make big changes to our entitlement programs. These are facts of life and the only question has been: When are people outside of the conservative movement going to realize it and act on it? The sooner we act, the better our future will be, and so, God willing, hopefully losing our AAA rating may awaken the American people to the economic danger we’re creating for ourselves by borrowing so much money to fund our rapacious government.
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