If the world economy is not bleak enough already Friday was another twist in this new chapter of life. Over the past few years more financial terms have been entranced in our everyday conversations than ever before.
Bankruptcy, previously seen as the last resort, has become a dinner conversation. Foreclosure is almost a comedy show between lawyers, banks and homeowners and the chance of finding a meaningful job with even a MBA degree and PHD can sometimes feel like the odds of winning the Amazing Race.
Well look no further for a continued meltdown of the world economy when you have Standard and Poor’s downgrading the long term credit rating of the United States Government from an AAA to AA+.
For the typical person the entre logic of these credit ratings can seem confusing, fishy and illogical at every angle. After all, with a $14 trillion dollar deficit don’t you think somebody would have actually lowered this credit rating a long time ago?
If you are 30 days late on a credit card payment you can bet credit card companies will stop knocking on your door but with $14 trillion in debt and NO PLAN to even improve the situation apparently you are still pretty good risk.
Of course the US dollar can not be destroyed. We need the dollar to be strong, the world needs the dollar to be strong but at some point it may be time to actually do something about it.
Financial ratings like Standard and Poor’s are much more complicated than just analysing payment history and financial resources but how many trillions of dollars do you have to be in debt to get a downgrade? Apparently the magic number may be $14 trillion and looking at the US Debt Clock the estimated US Deficit in 2015 will be almost $23 Trillion at current spending.
4 Companies now have better credit than the USA with all having AAA Foreign Long Term Credit Ratings by Standard and Poor’s
ExxonMobil Corp. – It’s so good to know that an oil company has better credit than the country who collects my tax dollars – Bravo Congress Bravo!
Microsoft Corp – if anybody deserves to have better credit than the actors on Capitol Hill it is Bill Gates but even he is probably smart enough not to co-sign a loan for America until an actual business plan is in place to improve this economy.
Johnson & Johnson – Even if the housing market and global currencies collapse people will still be making babies so this is probably not so surprising.
and the Most Ironic AAA Standard and Poor’s Rating goes to ….
Automatic Data Processing Inc. – One of the largest payroll companies in the world now stands above the USA in terms of credit rating. We can’t create jobs but at least one company certainly knows how to pay those who have them.
The GOOD NEWS
Is there any? This downgrade in credit rating is putting the long term credit outlook of the USA on par with many auto insurance companies and life insurance companies.
Is it not the job of elected officials to lead the country by example? At least they could just maintain a credit rating. Maybe this is the wakeup call Washington needed, I sure hope so.
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