So now Standard & Poor’s has given the USA a lower rating than it did the mortgage-backed financial instruments that caused the meltdown. Does this mean America is in even worse shape than one of those?
Or does it mean that the criteria S&P use are arbitrary, inconsistent, and possibly reckless?
As I was saying before, there is no line that can possibly be drawn between ratings that help investors profit because they guide them accurately, and ratings that help investors profit because they influence the market favourably. So the agencies may as well say things that benefit investors. Who has S&P’s downgrade actually benefited? Well China for one. Not only can they relish the prospect of charging Americans more to lend them cash, they can now talk down to them too. According to Reuters:
“The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone,” China’s official Xinhua news agency said in a commentary.
Xinhua scorned the United States for a “debt addiction” and “short sighted” political wrangling. China, it said, “has every right now to demand the United States address its structural debt problems and ensure the safety of China’s dollar assets.”
Burn.
So S&P are in the pay of China? No not really. They’re in the pay of money. The rating also benefits many of America’s wealthy; a loose affiliation of the sort of people who were being given money freely under a Republican administration, now using more forcible tactics to transfer funds from the public purse into private pockets. Even, the threat of the destruction of US Federal government.
Everyone can and will blame the Tea Party – after all, if they got into power these mentalloids really would repudiate American debts. They’re internal enemies of the United States, and not ashamed to say so. But they’re not going to get into power. They are just going to be used by the Republicans, as their suicide squad.
It’s not in the interests of the Republicans or their supporters to really bring about default – not when many of them are America’s creditors. But there is nothing to stop them taking it to the brink like this to get their way again. And again, and again.
