The Economy: Our Credit Rating and the Future

How many of you out there during the past three years have been told by your credit card companies that the rate you pay is going up, that the amount you have available to borrow has been cut in half or that you need to pay the card off because your borrowing privileges have been terminated?

In Boston and in every city and town in the Commonwealth, hundreds of thousands of people with good credit or even average credit have been downgraded because the economic system almost collapsed in 2008.

Try getting a mortgage or a personal loan if your credit isn’t perfect. Not easy, is it?

News that the government’s credit rating has been lowered doesn’t come as a surprise. The government for years has been spending more than we could ever spend and failing to repay it, more than we as individuals would ever be allowed.

In a way, there is something pleasing about the government’s credit rating being downgraded.

Now the government is in the credit pits like almost everyone else who spent too much, borrowed too much and who cannot pay it back with the same efficiency as it was taken or given.

The President said he was upset by the downgrade. He said S&P didn’t have it right.

He’s got a point. S&P is the same credit rating outfit that missed the collapse of the major banks and AIG and the collapse as well of the American real estate market.

How do you call yourself a rating agency if you miss something like that!

But the President, like everyone else in the national government is missing the point.

It is high time to get our house in order or there won’t be a house anymore as we know it.

This doesn’t mean we’ll all be in the streets looking for a place to live or struggling to feed ourselves. It doesn’t mean we won’t have electricity or running water or gasoline for our automobiles.

It means our economic lives will substantially change if we can’t meet our obligations.

It means that even if we meet our obligations, we’ve got to get going with the real job of reinventing the American economy so jobs are created – and in the tens of millions – not by 100,000 in a month.

Without job creation, without an expansion of the economy, without a national government prepared to make legitimate sacrifice across the board – and us, too – we are cooked.

The S&P shot heard round the world was not intended as a knife in the heart.

It was, in navy parlance, a shot across the bow that is meant to petrify rather than to damage or kill.

S&P’s rating change is deserved.

The moment has arrived for common sense, genius and sacrifice.

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