Not long ago, I was watching on CNN and some of the commentators were making a statement that Standard & Poor's should not have lowered the credit rating for the US government.
One of the commentators specifically stated that the United States could not default on its debt because it can always print more money to pay off those loans.
Yes, that may be true, however when you print more money, you cause inflation, and therefore your money isn't worth anything anymore, and you get into a perpetual cyclone of inflation.
If a socialist nation continually spends more than it takes in, and keeps borrowing money to pay for those social programs, and then starts borrowing money to pay the interest on that debt as well, it is digging itself into a hole, and causing that cyclone to become a self perpetual turbocharged force.
Now then, another one of the commentators stated that the United States has always had a stellar credit rating, and it has a wonderful credit history.
Okay so, let's take that point, and let's discuss this from a philosophical perspective.
You see, if an individual charges their credit cards up to their limit, and then the credit card company extends their limit, and they keep charging, but don't have the income to pay, then they are digging themselves a bigger hole each and every day.
Just because they've always paid their credit card bill on time in the past doesn't mean they will be able to do so if they don't stop spending going forward.
In other words they can't continue on that path without modifying their financial behavior.
Anyone who is in that predicament does not deserve a stellar credit rating, even though in the past they've been good.
After all someone who defaults on their credit cards may have always paid on time, without a problem, until that day when they don't.
The United States is over obligating itself to its social programs.
Indeed, many of the socialist thinking politicians have been spending the US treasury into oblivion.
To quote Ronald Reagan; "the Democrats are spending like drunken sailors, no offense to drunken sailors of course.
" The reality is that S & P did the right thing by lowering the US credit rating because currently as it stands, and if the US Congress and this administration continues on the same path, and if this administration gets re-elected, they are driving our treasury off a cliff.
Therefore those who buy US treasuries which will come due in decades to come, they are taking much more of a risk than is perceived, and therefore it does not deserve a Triple-A stamp of approval by the major credit rating agencies, no matter how good the credit history of the United States has been.
Indeed I hope you will please consider all this and think on it.