Tuesday, April 19, 2011

Standard and Poor's Negative Outlook for U.S. Debt Obligations

Standard and Poor's downgraded the future outlook of U.S. debt from stable to negative. THIS SHOULD BE TAKEN AS A GIANT WARNING MESSAGE! Lawmakers get the picture, you need to fix this debt problem and the sooner the better. The downgrade is unheard of for the U.S. This is a signal they have some doubts on whether the U.S. can pay its future debt obligations. The national debt is now at 95% of GDP. For comparison it was hovering around 70% when Bush left office. As long as it is under 90% you can still control it, but over 90% it starts controlling you. Were we your average country that would be checkmate, game over, don't pass go, your done. Having the debt at 95% of GDP means basically we are like Greece. The only thing saving us right now is low interest rates and the fact the Dollar is the world's reserve currency. If either of those two were to change there would be dire consequences. "Serious reforms are needed to ensure America’s fiscal health ," House Majority Leader Eric Cantor said in a written statement, calling S&P's announcement " a wake-up call to those in Washington asking Congress to blindly increase the debt limit." "It’s time for both sides to drop their partisan talking points and decide what we can do together while we still control our own destiny, If we refuse to negotiate within our own government, we will soon find ourselves negotiating with foreign governments and the international financial community on terms far less favorable than we enjoy today." Senator Tom Coburn said Monday. It's time to bring the budget back to balance. Reform entitlements, and start paying down our debt. The financial dooms day clock is fast approaching midnight. We need to get fiscal mess fixed and fast.

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