S&P Downgrades U.S. Debt
Well, the "big one" happened. For a few years now, you would read stories about how U.S. treasuries - once the "gold standard" of sovereign debt - would be downgraded. At first, reactions ranged from angry to skeptical.
Angry: How could you imply that U.S. treasuries could be anything but "AAA". What other country's debt is as safe as the U.S., the one and only superpower, the great bastion of democracy and free markets. Are you crazy putting these thoughts into people's minds? Are you trying to undermine our government, even our way of life? Are you trying to sow seeds of chaos? What are you, some kind of traitor?
Skeptical: Really, you don't believe that U.S treasuries could possibly be anything less than "AAA" do you? First of all, all that talk about the U.S. being on the verge of bankruptcy is ridiculous. Our national debt is just a function of our political and economic success. No one would lend us money if they didn't expect to be repaid. The fact that we've got all this debt means people believe we can repay it all. No other country could build up this much debt. You're exaggerating. You just want to draw attention to yourself. You're a doom-and-gloomer. You're an idiot!
Well, time went by and these sorts of reactions started sounding hollow and silly. More people took the threat of downgrade seriously. Some didn't - like Timothy Geithner, our esteemed Treasury Secretary, who just recently said "No way Jose" would our debt ever - EVER - be downgraded. (By the way, how did Geithner ever work his way up to Treasury Secretary anyway?)
So now it's happened. Where do we go from here? We're going to find out starting tomorrow.
Angry: How could you imply that U.S. treasuries could be anything but "AAA". What other country's debt is as safe as the U.S., the one and only superpower, the great bastion of democracy and free markets. Are you crazy putting these thoughts into people's minds? Are you trying to undermine our government, even our way of life? Are you trying to sow seeds of chaos? What are you, some kind of traitor?
Skeptical: Really, you don't believe that U.S treasuries could possibly be anything less than "AAA" do you? First of all, all that talk about the U.S. being on the verge of bankruptcy is ridiculous. Our national debt is just a function of our political and economic success. No one would lend us money if they didn't expect to be repaid. The fact that we've got all this debt means people believe we can repay it all. No other country could build up this much debt. You're exaggerating. You just want to draw attention to yourself. You're a doom-and-gloomer. You're an idiot!
Well, time went by and these sorts of reactions started sounding hollow and silly. More people took the threat of downgrade seriously. Some didn't - like Timothy Geithner, our esteemed Treasury Secretary, who just recently said "No way Jose" would our debt ever - EVER - be downgraded. (By the way, how did Geithner ever work his way up to Treasury Secretary anyway?)
So now it's happened. Where do we go from here? We're going to find out starting tomorrow.
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