The US Debt Downgrade – A look behind the scene?

So Standard and Poor has downgraded US Debt from AAA to AA. Noteworthy is the fact that other rating agencies including the Warren Buffet owned Moodys have not followed suit…as yet.

My enquiries says the move is not as simple as it first appears. Let’s take a look behind the scene to see how it may have come to be.

A group of people who are neither about being Democrats nor Republicans but who are the real power behind America meet in Dallas, Texas. Lets call the leader Hal.

Addressing the group gathered, he says “Gentlemen! All this $%%^&* bickering over raising our nation’s debt ceiling and achieving a balanced budget crap is getting to be a real pain in the butt. I know that many of your business decisions are being delayed for it. We can’t tolerate it for our own interest and in the interest of our beloved Nation. Whoever needs a balanced Government budget anyway?

I’ve come up with a plan that’ll give the nay Sayers something to think about and at the same time convey an interesting message to the global community. My plan is to persuade one of our rating agencies to downgrade our nation’s debt to AA from AAA for the reason that the recently approved increase in the debt ceiling is inadequate. The downgrade will be temporary and I’ll brief the President on the benefits. I assure you he’ll go along with the plan.

Here Gentlemen are the benefits for the rating agency and more importantly for us all and of course our beloved country:-

One. By going along with the plan, the rating agency concerned will be able to salvage some of the credibility they’ve lost since the sub-prime fiasco. They will appear to be independent and the US rating decision will give greater weight to the other Sovereign downgrades I’ll be persuading them to make.

Two. The perceived loss of face to Americans on the US downgrade will put pressure on all the traitors in the senate and house. They’ll be blamed for not supporting an increase in the debt ceiling when they could. You can bet that it’s going to affect their reelection prospects. So the next time they’re called to vote on an increase we’re not going to have any trouble from them… and that’ll suit us just faaaine.

Three. The US downgrade will provide a solid reason for rating agencies to re-rate other Sovereign debt and downgrade then accordingly. This will of course put enough pressure on the Euro and other upstart currencies that are trying to replace our dollar as the world’s reserve currency. It will go a long way to screw up the Euro – which as we all know is our nations long term goal.

Four. The US downgrade will send a clear message to countries like China etc. that have grown rich by exporting their cheap crap to us, just how much power we have over the value of their surpluses. It’ll show ‘em that if they don’t tow the line and keep investing in our debt, we can pres the ratings button and the value of their assets will drop like a bomb.

So, Gentlemen do I have your support or do I have your support?”

Hal received unanimous support and the rest is history…

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