Uncle Sam's American Express

And you thought your credit score was low.  As a nation, we can no longer even buy a used car from E-Z Credit Ed on the south side of town.  Standard & Poor's just downgraded the United States' outlook from "stable" to "negative."  What does that mean, you ask?  It means they no longer trust in our government's ability to pay of the debt.  What is Standard & Poor's?  They're a financial research company famous in the world of Wall Street, the "go to" guys for stock market indexes.  What does this mean? Well, I'm no economist, but it sounds like a major financial player just told the rest of the world that Uncle Sam is a deadbeat.  The Obama administration, however, is optimistic.  Austan Goolsbee of the Council of Economic Advisers says, "What the S&P is doing is making a political judgement and it's one we don't agree with, and it appeared to me that Moody's and some others don't agree with that judgement."  True, Moody's has kept the U.S. outlook at "stable."  For now.  But let's look at some other things going on in the world of money, like the budget debate in Washington.  The House of Representatives, which controls the "purse strings" of government, is calling for budget cuts while the Executive Branch claims those cuts will starve grandma and butcher your dog.  In a regular household, when the credit cards are maxed out, mom and dad sit down and talk about what they can do to spend less.  In this case, however, the government is "mom," and she aint' giving up her weekly spa treatment.  Don't be surprised when your car isn't in the driveway tomorrow morning, mom.  Which is why, in part, our credit rating has dropped, just as it did during the budget crisis of 1996 (only then, it was Moody's that did the downgrading).  Another part would be the printing of tons of money.  "Blah, blah, blah," you're probably saying, "I don't understand any of it, and I don't care, anyway!"  Well, understand this, then- there's this group called "The Fed."  That's the Federal Reserve, and they control the money supply.  Since we don't have a gold standard anymore, money is worth whatever it will buy, which means, of course, that when you buy a car, it's worth whatever the sellers say it's worth, or however much you're willing to pay for it.  When stuff is cheap, "The Fed" gets nervous, because they believe if prices fall, so will wages, so they artificially affect the markets to keep prices high.  Yes, "The Fed" likes inflation, which, as I'm sure you know, means stuff costs more, but you're not earning more.  This could only be a problem, "The Fed" reckons, if people start hording or if there's a scarcity of commodities.  Well...more bad news about that...the Saudis are cutting fuel production.  Add that to widespread rebellion in Egypt, Libya, Bahrain, and others, and speculators will go bonkers...which will drive the price of gas even higher, which in turn causes the cost of food to increase.  Of course, the national inflation index doesn't take food or fuel into account, so even though inflation is at it's highest in three years, economists say you aren't feeling it.  Of course not, right?  As long as you don't have to eat or drive to work, you should be in good shape!  Fortunately, we have programs in America like food stamps...which brings me back to the budget.  Something's going to get cut...probably a lot of somethings.  So what's it going to be?  Social Security?  Food Stamps?  Education?  Oh, and taxes will probably be going up, too, even if there are significant cuts.  Taxes go up on business, which means fewer new hires, which means fewer people paying taxes, which means more poor people who need government programs, which means deeper budget deficits and more cuts for programs that are supposed to help the poor, when what the poor really need are good jobs, and there we go back up the scale.  And all of this is happening while we print more money and raise interest rates to create inflation, while congress debates whether or not to give themselves more credit by raising the debt ceiling, while OPEC cuts oil production, while we are not allowed to drill for oil in our own country (hold on, I need to catch my breath), while unemployment is at 8.9%, and our credit standing as a nation as been downgraded to "negative."  Make sense yet?  So while you're feeling bad about your credit score of 590 and wondering if you'll get that loan for a used car, just count your blessings.  At least you're not that deadbeat Uncle Sam.
A few sources:
http://www.cnbc.com/id/42643384
http://www.cnbc.com/id/42595125/
http://www.cnbc.com/id/42637280/