08
Aug
11

Amazing Plummet of the Stock Market


On Friday, Standard & Poor, better known as S & P, downgraded the United States Credit rating from AAA to AA+.  Why is this so amazing?  Well, mostly because this country has not had a downgrade since 1917.  In other words, since companies such as S & P and Moody’s and Fitch have even existed.  Our credit rating was not even downgraded in the stock crash of the 1930’s.  Yet, now it has been.

Many argue that this is purely politics, that S & P is doing this in regards to not passing the bill which would help us balance the budget, but not based on the actual ability of the US to pay its debts.  But, if you ask me, if a country, business, or even a household can not balance its finances, how can it possibly pay off its debts?

This is why what happened in congress when they were last in session was so important.  The fact that they chose to go on vacation during a time when the country is in such a bad situation was really bad form.  All that they accomplished for the debt was to raise the debt ceiling.  But what about a long term solution?

Right now as I write this, the Dow Jones is down about 500 points.  Whether it will go further down when it closes, who knows?  It is like a very suspenseful movie, I am waiting to see the results.

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