Remaking America: Too much power in credit ratings?

https://readthespirit.com/ourvalues/wp-content/uploads/sites/17/2013/03/wpid-0420_ov_Standard_and_Poors.jpgAre the credit-ratings agencies in the driver’s seat, now? You and I have credit ratings. So does the United States. When we don’t keep our fiscal house in order, our ratings decline and it’s harder to get a mortgage, a loan for college tuition, or anything else that might require borrowing money. The same is true for a nation, and Standard & Poor’s—one of the big three credit rating agencies—is warning that it might downgrade America’s credit rating. Suddenly, we have another player in the mix with the power to remake America!

The rating agency (owned by the McGraw-Hill Companies) reaffirmed the nation’s AAA/A-1+ sovereign credit rating, noting our nation’s fundamentally strong economy and effective monetary policies. But its statement also described dark clouds that might result in a lower rating: big budget deficits relative to peer nations, rising government indebtedness, and deep conflict in the budget process. As a result, S&P revised its outlook on the long-term rating of the U.S. from stable to negative.

There is a “material risk,” S&P analysts say, “that U.S. policymakers might not reach an agreement on how to address medium- and long-term budgetary challenges by 2013.” This imbroglio would result in a lowering of the nation’s actual credit rating, saying that America is no longer the world’s premiere economy. No doubt each side in the budget battles will attempt to use this warning to its advantage.

Regardless of the politics of the budget, tell us you feel about this new development.

Does our nation’s credit rating concern you?

How did you react to the S&P news breaking this week?

How might this new player reshape our nation?

Please, Comment below—and help us spread word through Facebook.

(Originally published at www.OurValues.org, an online experiment in civil dialogue on American values.)

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