American Downgrading

A huge blow for American pride occurred over the summer when Standard and Poor, the rating agency downgraded America’s credit rating from AAA to AA+. This drove up America’s borrowing costs and further deepened tensions between the Republicans and the Democrats. The reason for the downgrade? Their political system is in a state of deadlock, the Democrats control the House of Representatives and the President’s office and the Republicans, with a high amount of Tea Partiers, control the Senate. For a Bill to be passed into law it needs the consent of all three. This problem rose its head in the summer when America’s debt was raising towards its “ceiling”, if it reached this ceiling then America would not be able to borrow and more and would therefore default on its old debts, this would send the world into economic chaos once again. Republicans in the Senate were refusing to pass the bill to raise the debt ceiling unless there were major cuts to public spending and for there to be no tax increases for the wealthy, whereas the Democrats didn’t want to cut very much and wanted higher taxes.

The political instability that stems from that has spread into every area of American political life and it is making solving the simplest of problems almost impossible. This was the reason for the downgrading. It was recently announced that 2011 was the least productive year in congress since records began.