Yesterday S&P downgraded US govt debt from AAA to AA and falling (our interpretation). So, what to do? Why, shoot the messenger, of course! Almost immediately, people began slamming the rating agency! Never mind the huge and growing debt and increasing doubts around the world about the ability of the U.S. to keep paying on existing debt.
NYT reports that there was anger among Congress people and their staffers. They couldn’t understand what the agency people were saying. We guess that “Spend less” is just too, too complicated for these sophisticated people who think that all you have to do is wave your wand and presto! The money is there!
It’s getting harder to balance or even pretend to balance the budget what with the still falling housing market and the stubbornly high unemployment rate – 9.1% or 9.2%. That’s a heck of a lot of tax consumers who USED TO BE tax payers.
Why is a falling housing market bad? Because three federal agencies have sucked up nearly all the housing funding in existence right now and they were among the primary actors who contributed to this current mess with NINJA (no income no job) loans and adjustable rate mortgages that are still blowing up in peoples’ faces.
There was a good commentary on this in The Sovereign Man yesterday. He doesn’t just moan and cry either. He has an investment recommendation. We’ll just quote a little bit from the rest of the article, but highly recommend that you read the entire piece. He begins by noting an almost deafening silence from the White House, then goes on to quote one official who finally emerged from his bomb shelter to proclaim:
“There are things we know work and we know will have a positive impact, and these are the things we’re going to push for and fight for.”
This is scary for a number of reasons. How do you ‘know’ that something works, when nothing you’ve done has worked so far? How do you ‘know’ that something will have a positive impact, when just about everything that you’ve tried has been destructive?
And yet, they’re going to keeping pushing and fishing for more of the same– more spending, more debt, more money creation, all aimed at senseless, wasteful ‘job creation’ programs.
Three years and trillions of dollars into the full-on crisis, there are few tangible results to celebrate.
Have a nice weekend.