After we were assured that raising the debt ceiling would avoid serious financial repercussions for America, the US credit rating has been downgraded from Triple A for the first time in history.
Rating agency Standard & Poor’s lowered the nation’s AAA rating for the first time since granting it in 1917 three days after the debt ceiling deal was struck. The rating was lowered to AA-plus.
The United States currently has a GDP per capita of $47.3K, a GDP of $14.66 trillion and a debt/GDP ratio of 100%, i.e., the debt is the same as the GDP or, in short, we owe as much as our annual economy is worth. This ratio means that America is in serious trouble and that Obama’s leadership is failing badly.
On August 7, on the Sunday morning TV political talk shows, the Democrats were out in full force amazingly seeking to deflect any blame for the downgrade from the Incredible Shrinking President Barack Obama. Senator John Kerry of Massachusetts and others, using Democrat party talking points, called it a “Tea Party downgrade”, somehow blaming in on a political group that only came into being on April 15, 2009.
This indeed shows just how terrified the Democrats are to admit how their policies are being viewed by the American people. After all the downgrade came just three days after the debt ceiling was raised $2.1 trillion over the strenuous objections of the Tea Party.
If the debt ceiling had been flat-lined like the Tea Party wanted, the downgrade never would have occurred. Because the downgrade came from S&P’s perception that the nation is spending too much money. Which matters not a whit to the Democrat party, the party of debt. The party of $14 trillion in American debt. The party of the open checkbook.
Republicans are warning rightly that Obama’s policies are imperiling the nation, with his trillion-dollar-plus deficits three years in a row now, and more coming. Our nation is simply spending way too much money for many reasons – because our medical system has too many people expecting expensive care while too few actually are paying for it; too many people are on the Social Security dole and on the SS “disability” dole, and on Medicare and Medicaid; too many federal employees are making too much money such that the counties around Washington, DC are the wealthiest in the country; almost 50% of the workforce is paying zero federal taxes; and there is massive overspending on food stamps, welfare, housing subsidies, ‘global warming’ research, National Public Radio, the Cowboy Poetry festival, ACORN, Planned Parenthood, Amtrak and a thousand other wasteful programs.
And we should pull our military forces out of the fruitless Afghanistan conflict, and out of wealthy nations like Japan and Germany which must defend themselves.
Consider these other nations and their wealth per capita, their Gross Domestic Product (overall size of their economies) and their debt ratio in relation to GDP. These are very interesting numbers because we are always led to believe that Europe has very bad economics. But Europe has been making reforms in the last decade as shown in these numbers of nations with solid Triple A debt ratings: Denmark: GDP per capita – $36.4K, GDP – $202 billion, debt/GDP ratio 46.6% Germany: GDP per capita $36K, GDP – $2.94 trillion, debt/GDP ratio 78.8% Canada: GDP per capita $39K, GDP – $1.3 trillion, debt/GDP ratio 34% Holland: GDP per capita $40.7K, GDP- $677 billion, debt/GDP ratio 64.6% Norway: GDP per capita $52K, GDP – $255 billion, debt/GDP ratio 47.7% Sweden: GDP per capita $38K, GDP – $355 billion, debt/GDP ratio 40.8% Switzerland: GDP per capita $41.6K, GDP – $325 billion, debt/GDP ratio 38.2%
France and Britain may lose their Triple A rating: France: GDP per capita $34K, GDP – $2.15 trillion, debt/GDP ratio 84% Britain: GDP per capita $34.9K, GDP – $2.17 trillion, debt/GDP ratio 76.5%
Now look at the debt ratios of some other nations in Europe: Sweden 40%, Estonia 7%, Bulgaria 16%, Spain 61%. The worst were Greece, 143% Italy, 119% Portugal, 93% and Belgium 96%.
So Europe is generally in better shape than the US. And America was in good shape as recently as 2008 when our debt/GDP ratio was only 69%. But look at the ratios since Obama came into office: 2009 ($14.26 trillion, 83.3%); 2010 $14.62 trillion, 94.3%). In 2011 we have reached 100% of $14.66 trillion.
Notice how little GDP growth there has been since 2008 – hardly any – but how much the debt has increased under Obama. This is clearly a sign that Obama must go.
And perhaps it is a sign that Europe needs to chip in to help the American debt crisis. After all, America spent many, many trillions to fight World War II to save Europe; to reconstruct Europe under the Marshall Plan; and to defend Europe from the intimidation of the Soviet Union from 1945 until 1991.
Europeans nations should now begin to repay us the money we spent on them. It is only fair.
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