Who’s to blame for the S&P downgrade? or Who’s to blame for the state of the US economy right now?
Although stocks have made a monster recovery from those early 2009 lows they have moved down so fast since May 2, 2011 and we are now going into a critical week of trading where panic & emotions will be the lead driver to market & stock prices. Could be Armageddon or not as bad as everyone thinks . If you read articles over the weekend you’ll see the wide scope of different viewpoints.
But let’s get back to who we can blame since that’s always a good thing to do with messes/crisises.
1) Blame politicians for wasting time & money
Waiting for last minute to settle major crisis situations. Worrying just about the next election and looking after the interests of their biggest contributors and lobby groups instead of the people that voted for them.
2) Blame lobby groups for putting themselves and those that pay them ahead of the American public
Lobby groups are so powerful that they get oil companies with record profits to get tax incentives ( money that the US could have used). That’s their job I know but has to be one of the worst ways to make a living but i’m sure it pays them very well.
3) Blame Wall street fat cats for only looking after themselves.
Having extreme wages at the top end but messing up the real estate market In the process, getting a bail out without a slap on the wrist. Again money that could have helped the US.
2) Blame US companies for outsourcing and not keeping jobs in US
For avoiding paying taxes in the country that made them great
3) Individuals for buying the cheapest products and imports from China now accounting for 20% of all imports.
For believing their voice will not be heard by politicians. Have you forgot the history of the US how one person can take a stand and a movement starts where politicians have no choice but to change policy or laws? We’ve even seen that around the world recently how the power of Twitter and Facebook is having dramatic change in other countries.
4) Blame the S&P and other ratings agencies for keeping AAA ratings on toxic assets between 2003-2008 that definitely help fuel that 2008 market drop even more. Maybe they are trying redeem themselves with US downgrade on Friday to send a message that they are on top of it this time around. Whatever the reason they’ve had their part in screwing up the US & people’s 401k’s in the past.
5) Blame my dog ( actually he was not even involved in this mess) he also he lost a tooth the other night so be nice to him since he’s under the weather this weekend. But hope the dog tooth fairy is good to him since saw him on the bed this morning taking a peak under the pillow
To conclude EVERYONE is to blame in one way or another.
Instead of finger pointing and blaming the S&P, politicians, wall street, businesses & ourselves would it be too simplistic to look at doing this? :
1) cut all government expenditures by a set % .I’m sure there is enough waste in each Agency that 2%-5% can be cut across the board , not based on the best lobby group. Then won’t be based on who can cut the best deal in Washington but a fair across the board cut. This way no party makes concessions and less time is wasted trying to figure out what to cut.
2) have companies & wealthy individuals pay a bit more in taxes –
Also consider a small value added tax , make the tax code simpler so that companies are willing to pay taxes in the US and not looking at best way to avoid taxes.
Wealthy individuals like Buffett are already willing to pay more
US companies have over $2 trillion money just sitting on the side. I’m sure to save the US economy they have no problem paying a bit more.
I know the above sounds to simple but since everyone is partially to blame then everyone should pay a small price in order to get the US back on track.
Won’t be perfect but would set a precedent that the US can make tough choices when it counts.
If it’s not addressed now that it can become manageable then will be much tougher the larger the US debt gets. Its not getting smaller but imagine if the US Debt ballooned bigger then it is now. We would be on track to the same extreme path to put the US on “junk status” like a Greece , then “austerity” would be the only way to fix it and you can see how poorly that is working out.
Some think the US is already on an austerity path since tough cuts will have to be made. We will see what the new appointed committee comes up with by November.
I personally have a lot invested in the US economy both in stocks and real estate and I’m an optimist. But if this is not addressed could be a spiral down of one of the greatest countries in the world.
Lets hope government , business and individuals take this negative S&P downgrade this weekend and use it as a positive step for change.