America's Loss Of It's Triple AAA Credit Rating Calls For Term Limits On Members Of Congress!

This week the Financial Credit Rating Agency "Fitch" downgraded the United States credit rating from "AAA" to "AA+" and the media treats this as a non-event, in part, because today the media isn't a fully good media, journalism no longer has the integrity the profession used to have today its largely all about selling advertisements and our country is a less good country because of it. If this downgrade happened fifteen years ago the media would have treated it as a major event like it deserves to be treated and it would have highlighted the reason why were in this situation is the failure of our government to do its basic duty to be a good steward of our nation's finances and it would have underscored that at the absolutely bare minimum America needs government reform in the area of term limits for members of Congress, two terms for Senators and five terms for House members; members of Congress need to stop prioritizing getting elected and start prioritizing protecting and advancing the interests of the American people.

What the media should be doing is reporting to the American people that this Fitch downgrade means that now two of the major financial credit rating agencies has downgraded the U.S. credit rating to "AA+" so now the United States of America no longer has a triple AAA credit rating. This is an historic and terrible event for America that now means United States Treasury bonds no longer have a triple AAA credit rating the largest sovereign debt market in the world a market worth trillions and trillions of dollars the bonds trading in this market are no longer the safest bond from an investment standpoint. If the media was doing its job it would be spotlighting that the United States, European and other major economies hold that the rule of law governs their society, the rule of law isn't something one only heeds if one feels like it, if it is politically correct to do so, it isn't a subjective mandate on society. The media should be pointing out here that trust documents and bond covenants and other contractual obligations which require monies be held in a triple AAA rating security now require those individuals or entities bound by these legal obligations to sell their U.S. Treasury securities and buy triple AAA securities if they can find them. The world should now be seeing large scale selling of U.S. treasury bonds this isn't discretionary with these holders they are legally obligated to sell these non-conforming securities; the world and the United states should be seeing the price of U.S. Treasury bonds dropping because of this development.

This writer isn't happy about this unfolding of the U.S. Treasury markets that should take place. What should also be unfolding with this large scale dumping of Treasury bonds is public recognition of how past and present Congresses and Presidents failed in their duty to the American people. The public conversation should now be taking place on what type of government reforms the American people will cast on Washington because of the harm Congresses and Presidents wrought on America because of mismanagement of America's finances which brought on the country this financial downgrade and the loss of our precious Triple AAA credit rating!

 

The downgrade was appropriate, in many ways.
But from the government's perspective, and from the perspective of "the good of the economy", a downgrade is not good. It makes maintaining the national debt more expensive, ironically making it less sustainable and increasing the risk of an eventual default.

A credit downgrade has a tendency to drive interest rates up, to compensate for the perceived increase in risk.

Yet another reason for the downgrade may have to do with inflation. If inflation suddenly increases, lenders to that government have lost wealth. It's as if the agreement has been altered. (Imagine for example if you got paid back but without the interest on the loan that had been promised to you)

 

That is correct. There are clearly some double standards. If you go back in time to Obama's presidency, during a budget impasse, this same media was going on and on trying to drive home the point to Americans that Republicans were creating a big risk to the economy and that it would do big damage to the economy if Republicans held out refusing to agree to the budget and the U.S. even temporarily defaulted on its debt causing the credit rating to go down.

Now all of a sudden it seems to be a non-issue.

I'd say it's almost Orwellian.

 

With a credit downgrade contributing to pushing up interest rates on the debt, you can read about what that could mean here:
Current U.S. National Debt approaching $20 Trillion

 

This can't be true because liberals tell us that this administration is doing a great job with the economy.

Gas is 389 here now and creeping back up to $4

 

It's true that the price of U.S. Treasury bonds will drop and people will be more reluctant to loan money to the U.S. in response to the credit downgrade.
However, the official credit rating is only one source of information, and investors can respond to other information, and probably have already done so in the past.
I mean if the credit rating drops due to some specific simple reason, and investors can easily see that reason, then these investors can make up their minds for themselves whether they believe that reason should have an effect on the credit rating. Investors can think independently, if they were being entirely logical and rationale about it, though many rely on the official credit rating as well.

Another thing to consider is that due to rising inflation, it becomes more important than ever for the U.S. to turn to investors to finance the debt, rather than relying on the Federal Reserve to buy up the debt. The Federal Reserve, in this economic climate, is going to be increasingly unable to finance the debt without it contributing to higher levels of inflation and uncertainty.

 

Ban lobbying and other forms of corruption in government would to fix the government.

 

another thread: U.S. credit rating is downgraded, What does this say about Biden's policies?

 

Sounds nice, but actually sounds kind of uninformed if you start thinking about it.
Lobbying is not necessarily corruption, and what forms of corruption are you referring to exactly that are not already banned?

(That's a rhetorical question and I don't expect you to answer in this thread, because it would derail the topic)

 

Such drama. Reminds me of the kid who wants to argue with the teacher when they are going over the test because they got 1 wrong. This isn't the end of the world. The dollar is still king of the jungle.

 

I don’t think anyone is denying that it is currently the world reserve currency.

 

Except when it ends up causing problems, the Left will just blame those problems on "Capitalism" and the rich, without ever bothering to think about where those problems came from or what economic factors exactly caused the change.

Lots of people are not going to take the time or effort to think about what this could likely do.
Higher inflation, people not being able to buy as much, government not being able to spend as much since the required interest rates on the debt will increase. Any Americans going on vacation to a foreign country will find it will be a lot more expensive, since this will affect exchange rates.

 

True, 59% of the world's reserve currency is still in dollars.

 

Its not the first time it happened in 2011, and last time the reason and the reaction was the same. Its pretty much the same exact scenario, with the government deliberately driving the nation to brink it default, and then cracking a "deal" the last minute. Everyone saw it in the news then, and they saw it in the new now. Its a silly game and does nothing but hurt the US. Not sure why you expect everyone to panic though.

 

As long as the dollar is the world's reserve currency, the us bond will be the preferred investment for the players that matter.

 

Yep. As long as.

 

1) Thanks for the info. I hadn't heard this, in the MSM-- and I agree with you, that this should have been major news.


2) However, I disagree with you, that the MSM is shy about mentioning this subject. Every time that Republican House members, threaten to drive us over the cliff of defaulting on our Debt, the news media is full of people talking about our lowered credit rating, being one of the repercussions, if they should go through with it.

I suspect the reason this story did not get more play, comes down to the economic considerations, of our Capitalist media; that is, this downgrading happened, unfortunately, at a time when peoples' attentions are fully engaged in the Trump indictments. So that is what the press is going to most focus upon.


*3) You need a source, for your contention. What percentage of U.S. backed securities are being held by funds or entities which are legally, or even by their own policy, limited to only AAA rated securities, so would need to dump a AA+? I think this is a tiny fraction of institutional investors who make that, their threshold; it would be very problematic, to have to purge one's holdings of all of any given security, every time a AAA rated security, got minimally downgraded. Also, these would be, I would expect, a very small bit of all those who buy American bonds, Treasury bills, and so forth. Your fear of a massive dumping, I am fairly sure, is a fiction.


4) Your argument makes no connection between the partisan games-- or, ideological divide, if you prefer-- which led to this downgrade, and the length of time in office, of those who instigated the uncertainty-- since your title tries to tie the difficulties, to our not having political term limits. However, in point of fact, the Congresspeople who have no regard of the consequences of defaulting, from the Tea Party, to today, have been predominantly, the new members of Congress.