US Credit Rating Downgraded while People on Food Stamps on all-time high
The unthinkable has happened! US Credit Rating has been downgraded from AAA status by S&P. Even the Debt Ceiling deal last week wasn’t enough to help in this case. Why? Because, Standards & Poors says that the US not only had to raise the debt ceiling but also have a “credible plan” to take care of the Long term Debt that US bears currently! In a report S&P says:
“The downgrade reflects our opinion that the … plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.”
As the rating fell to AA+, China is shooting off missives to US on how to manage its economy (China scolds US over S&P credit downgrade), while the rest of the world tries to retain faith:
State news agency Xinhua said unless the US cut its “gigantic military expenditure and bloated welfare costs,” another downgrade would be inevitable. But other countries, such as Australia, France and Japan, said they retained their faith in US bonds.
On the heels of this downgrade comes the news that US now has a record number of its citizens living on Food Stamps (food aid).
Putting these two thing together paints a very scary picture – specially in the background of the debate that the country’s political parties engaged in for the Debt Ceiling and the insistence of the Republicans to cut all sorts of programs for poor just to save the taxes being raised on the rich.
Given that situation, its not inconceivable that one day even this Food Stamps program will be taken out. More so if additional people keep adding on to it and driving up its cost to the Government! Because of the high cost it may add to the Government budget, it will be very much in the eyes of many. And that is unfortunate because that’s a catch 22 situation for the economy.
The economy isn’t doing well > People losing Jobs > Ending up on the Food Stamps > Govt Expense high > Lower Revenues for Govt due to unemployment > Cut Food Stamps Program > Poor without food and without houses > High degree of Chaos and Anarchy
What we are going to witness in US in future will be a pretty depressing picture. Not because I am a doomsday predictor but because the way the political debate is posited here is astonishingly vitriolic. The Tea Party movement has ironically in today’s time become the single important force that will erode the Freedom of the US forever!
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