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Standard & Poor’s Downgrade: U.S. Going the Wrong Way?

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While I admire the American democratic process that is as strong as the will of the politicians to stick to their guns, I was hoping that both sides of the debate on the debt ceiling would step back and see the bigger picture. Until the end of the discussions, both parties remained staunch in upholding their own set of ideologies. No one found the guts to say, “Hey, we’re lost. We need to trace back our steps in order to find our way out of this mess we’re in.”

With that said, let me show you the path that America had taken these past years. Below is a chronological listing of events that I have been following ever since I can remember:

January 2001: President Clinton’s term ends with a budget surplus. President George W. Bush resumes office.

September 2001: Nine Eleven.

October 2001: U.S. starts war in Afghanistan in response to the attack on 9/11 in United States on the World Trade Towers.

March 2003: Bush launches invasion of Iraq

October 2008: Bush administration and Congressional leaders call for the government to spend up to $700 billion to buy distressed mortgages.

Before President Obama got elected to office, Huffington Post had a glimpse of the future in an article written on July 10, 2008. It said,

The government’s budget deficit will surge past a half-trillion dollars next year, according to gloomy new estimates, a record flood of red ink that promises to force the winner of the presidential race to dramatically alter his economic agenda…That figure is sure to rise after adding the tens of billions of dollars in additional Iraq war funding it doesn’t include, and the total could be higher yet if the economy fails to recover as the administration predicts.

Allow me now to say this. Understandably acting on fear and anger, you marched into war in two countries, which emptied the surplus you had. All of you were participants in allowing a group of Wall Street speculators free rein in the housing market and everything else that left Washington with no other choice but to bail them out with taxpayers’ money. Now, your credit rating has been downgraded. They say it could mean higher interest rates for credit cards, loans, and mortgages.

If it happened to my own family, we would have no other choice but to tighten our belts and ask those who can afford to put more money in the coffers to pay our debts.

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About Cordi Villa

  • eva

    why cant articles like this be front page news ???

  • Glenn Contrarian

    Hello, Cordi –

    Great article, and sure to be panned by the BC conservatives since you lay the blame where it belongs.

    But I wanted to mention an observation – I’ll be moving to Quezon City in a few months (my oldest son is teaching college and my youngest son is in fourth-year high school, both in Q.C.) for the reasons I listed in this article. It is as I’ve heard a few Pinoy say, America’s a great place to make money, but it’s better to grow old in the Philippines.

    But back to the observation – when I visited my wife’s family there while we were in the middle of the Great Recession here stateside, I traveled from Taguig (which is a modern and beautiful place even by western standards – Google “Serendra”) to Baguio to La Union and back to Q.C., and I saw nary a sign of the Great Recession that the U.S. and Europe were going through. I figured this was because of the Pinoy attitude: if you don’t have a job, don’t sit around waiting for one but go out and make one – start a business, even if it’s selling taho in the iskinita. I think that’s why most Pinoy stateside are either professionals or businesspeople, or are trying to start businesses of their own.

    But that’s the difference between America and the Philippines – America has a reliable way to collect taxes, whereas the Philippines doesn’t, and so they have to rely greatly on import duties and fees to help finance their government (which is why electronics is so much more expensive there). America, OTOH, reliably and automatically collects taxes, and so can afford the wealth of social programs we have here (not to mention our hideously-expensive military (I’m retired Navy)). If the Philippines had a better system of collecting income and business taxes, they’d be able to afford so much more and provide an actual social safety net.

    But I suspect that will not happen in my lifetime…and even though I’m a dyed-in-the-wool bleeding-heart liberal, I sometimes wonder if it’s better that it doesn’t. Why? Because without the social safety net, the Pinoy are forced to strive harder – witness the bookstores where the fiction books take up less than a quarter of the space, but nearly half consists of professional certification and qualification manuals!

    And because they’ve had to strive harder, they’ve excelled in much of the world, as is evinced by the fact that one-third of ALL crewmembers on the world’s merchant marine ships are Pinoy. It helps that most Pinoy are intelligent – indeed, can America produce an example of a polymath like Jose Rizal who, by the age of 32 when he was martyred, had become a practicing eye surgeon, had published two books of national importance, had traveled the world, and knew twenty-two languages? Perhaps Benjamin Franklin comes close, but that’s about it.

    Don’t get me wrong – I’m no Filipinophile, for there’s many problems there that we would not abide here stateside (again, see the article I referenced above). But there’s a lot of lessons we could learn from the Philippines. Problem is, America’s got this attitude that if the idea didn’t come from America, then it must not be a good idea. That attitude is IMO America’s greatest shortcoming – the unwillingness of Americans to learn from other nations or cultures…which is probably the same obstacle faced by every nation in history that has stood unchallenged.

    Sorry for the rambling comment – it’s just that I’m glad to see someone lay the blame where it belongs, and that the same someone can understand and appreciate the observations I’ve made over the years.

  • Cordi Villa

    Hi Glenn,

    I agree with you on your observations about the Philippines. We lost our way a long time ago and have been so far out that we decided to camp. Haha!

    Seriously, my intention is never to put the blame but to share with you my observations, coming from lessons learned which I am still hoping is not too late.

    Before I go, let me tell you that we will always look up to America for you truly are a great nation.

  • Cordi Villa

    Oh Glenn,

    By the way, good luck on your move to Quezon City. My family still lives in Manila. Like you, I am planning to move back when my work is done.

  • Baronius

    For the past month, we’ve been told that we needed a budget deal no matter what, or our credit rating would be in danger. The tea-party types were saying that we needed a good deal; more extreme tea-party types were saying that we shouldn’t make a deal at all. All the liberals on BC were saying that it was irresponsible for the Republicans to be holding out.

    So, who turns out to be right? We passed a lousy deal and our credit rating drops, just like the non-nutty fiscal conservatives warned.

  • Glenn Contrarian

    Baronius –

    A good deal would have included some kind of rise in revenue – but the Tea Party insisted on zero rise in revenue at all…even when said rise would have consisted solely of cutting loopholes for corporations and millionaires. Every single member of the Tea Party signed on to Grover Norquist’s no-new-taxes-or-else pledge, so how can you say that anyone in the Tea Party wanted a good deal…

    …especially since we’ve ALREADY got a lower tax burden (as a percentage of income) than we’ve had since Truman was president????

  • Baronius

    Cordi – You say that it’s time that both sides take a step back. Did you? Before you wrote this article, were you a supporter of the War on Terror and the Wall Street bailout?

  • Cordi Villa

    I was in NYC a few blocks away when 9/11 happened. I had to bunk in some beds allotted for us who couldn’t go home past the tunnels and bridges since the city was sealed after the attacks. My heart was opened wide for what I witnessed that day. Yes, I was against America going to war because we were raised not to act on anger,and no I recoiled at the mere thought of bailing out the rich people who had gotten away from paying taxes, who were irresponsible enough to gamble with other people’s life savings, and who are the very people who are opposing a bipartisan solution to the problem. I love America for its sensibilities that we lack in our country and I think in Asia in general. It pains me to see that you are not making it work now when you need it.

  • Baronius

    So Cordi, you’re not really leading by example when you say that everyone should take a step back and look at the big picture. You’re saying that everyone should step back and agree with you. And hey, there’s nothing wrong with saying that; just don’t claim that you necessarily have better perspective.

    I realize that you’re not just arguing a partisan position here. You didn’t include Bush’s expansion of Medicare in your list of problems. But by not including it, you tell a story about our national debt without one mention of entitlement programs.

  • Glenn Contrarian

    Baronius –

    Remember, Cordi is an immigrant. He won’t know absolutely everything about our political history. Not only that, but it’s not really that well-known how expensive Medicare Part D was – and continues to be – for the American taxpayer. For instance, I could go Down South and ask my family or their friends if Bush’s Medicare Part D cost more than Obama’s stimulus (which it certainly did)…and each and every one of them would be baffled and say, “What the hell’s Medicare Part D? It’s all just Medicare!”

    But then IMO immigrants are more classically American than those hyper-conservatives who collect Social Security and use Medicare and all the while decry how “the godless lib’ruls are a-comin’ to take away our Social Security and Medicare and turn America into a socialist state!”

  • Cordi Villa

    Hi Baronius, I guess you can call watching from where I am right now, in Canada, as having stepped back. And like I said, I am now an observer, and not able to sweat the details so to speak.

  • Cordi Villa

    Hi Baronius,

    Please try to see what I am doing. I am not claiming that I have a better perspective. I selected this column titled “There, I Said It!” because that is exactly what I am trying to do. So there. In all sincerity, :)

  • Cannonshop

    #2 Hey, Glenn, when you get the Philipines, are you going to still pay your taxes after they go up?

  • Cannonshop

    Okay, that was a cheap shot, even I admit it.
    But I think it points to one of the fundamental problems when we discuss increasing taxes-the people most keen to do so, are also most keen to make sure their OWN taxes don’t increase, or that they have plenty of shelter for their funds- i.e. that they are able to hide their OWN money while increasing the burden on others.

  • Baronius

    Cordi, I realize that. But that first paragraph depicts a need to step back from political ideology and look at how we got here, and you didn’t really do that.

  • Glenn Contrarian

    Cannonshop #13 –

    1 – my retirement pay (which you don’t think I get) will always be taxed.

    2 – I will still be paying property taxes here in the states.

    3 – If taxes go up, that’s GOOD! Why? Because my tax burden – and YOUR tax burden – is lower than it has been since the Truman administration.

    4 – It’s YOUR side that’s trying to protect the millionaires and billionaires from paying as much of their income in taxes as YOU already pay. Maybe you think that’s a good thing – but history shows otherwise.

  • Cannonshop

    #16:

    1. Glenn, I think you GET your retirement pay-I just also think you’ve made contradictory assertions as to what you did prior to GETTING it.

    2. Until…when? when they go up enough to cut into that fixed income? Minus some supplemental increase, you’re going to have to make a decision as to whether or not it’s worth keeping that property when you’re living in the P.I.

    3. Weak economy, shaky employment conditions, a society in debt, and a government that just secured yet another credit card so that it can continue spending money it does not have. Yes, Taxes will go up. Not a matter of if they should or not, it’s something that WILL happen-at least, in terms of raw dollar amounts, inflation does that, and the Tax Brackets don’t account for inflation or loss of purchasing power/relative value of the dollar, or whether employment is, in fact, gainful or not.

    #4 Your side ARE the Millionaires and Billionaires (George Soros, Bill Gates, Steve Jobs, Paul Allen, Most of Hollywood…) do you really think the Millionaires in Congress are going to write Tax Laws that mandate THEY pay? Let’s check…

    Oh, right, Rangel, Geithner. NO.

    Other people pay, we pay, people in the middle pay. YOUR heroes don’t even pay the taxes they WROTE INTO LAW.

  • jamminsue

    I’d would just be happey to have a job like the one that disappeared in 2008