Everywhere I look there seems to be bad news regarding the economy. The television news, newspapers, internet, as well as word of mouth, are all saying it. “The United States is going to see a double-dip recession.” “The U.S. is going to default.” …and especially, “The U.S. is going to be downgraded.” Most people are saying, “What does that mean anyway? Downgraded? That won’t affect my life”.
But that could not be further from the truth. If there is a downgrade in the credit rating of the United States, tax hikes cannot be far behind. If the credit rating is downgraded then interest rates on the United States debt will increase, resulting in a rise in monthly government payments, as well. With the government paying down our debt at a higher rate, an increase in taxes would be levied to accommodate the new, higher interest. All of these increases would result in more difficulty for the average American to purchase a home, due to the negative effects on our banks. In addition to all of this, we cannot ignore the possibility of an increased in market inflation across the board making saving for retirement almost impossible. To say that a downgrade in the credit rating would not have a global effect would be, at best, naïve, at its worst, dangerous.
Now that we know how it would affect us, the questions that beg answers are, “Why did this happen?” “Did we have it coming?” The downgrade was hoped to be avoided through the debt deal made by Congress and the White House. However, going forward for two years with an unbalanced budget, amidst the political climate in Washington, coupled with the recent economic downturn, has caused credit agencies, such as S&P, to warn about an upcoming downgrade. If the economic “geniuses” in Washington were doing their jobs though, they should have seen this coming. When Japan was downgraded from their AAA rating in 2001 to AA, their deficit-GDP proportion was similar to what ours is today. We should have seen this coming. We DID have it coming due to the irresponsibility of our elected officials, both past and present.
However, there is good news. If there is a downgrade in the credit rating, it will probably not be permanent. One of two things must happen for us to be re-upgraded: our elected officials must answer to the American people, fulfill their sworn responsibilities, and balance the budget of the United States; or they must pass a Balanced Budget Constitutional Amendment. If our elected leaders accept their responsibilities for the first time in a long, long time, we elect a president whom we believe in, and who believes in us, and we, as a people, take command of our financial destinies, this country can once again be on the path to prosperity.
Justin Annunziata is a 15 year old High School Student from the great state of New Jersey. He is a conservative political enthusiast, who hopes to go to college for political science and foreign affairs, and follow his dreams to enter politics. He is an involved member of the community, and President of his local Youth Council.