The U.S. debt bomb continues to tick. With a monthly federal deficit equal or greater than the outrageous federal deficits under President George Bush, the miniscule financial cuts in spending proposed by both Republicans and the even more microscopic spending cuts proposed by the Democrats are starting to severely hurt both the U.S. economy and the U.S. dollar.
In today’s news, the S&P agency downgraded the United States debt outlook from stable to negative.
According to the Guardian, this is the first time the the United States has had a negative ratings in seventy years.
The USA Today calls it “a kick in the pants” for Obama and Congress. They pointed out that Brazil went down this road in the ’80’s and 90’s by creating hyper-inflation that crushed people’s savings and standards of living.
We have seen what happens to the value of currency in countries that cannot control their printing presses.
A classic example was the Weimar Republic in Germany in the early 1920’s is a case in point.
A more recent example is Zimbabwean dollar after Mugabe got finished with it.
Perhaps you remember the story from 2009 of the ‘estatic’ British hotel workers when they received a $25 BILLION dollar tip.
According to UPI, the tip was worth less than a penny due to the ‘231 million percent’ inflation in Zimbabwe.
A worthless dollar is the certain near future value of the dollar if our representatives in Congress and the White House do not get their collective act together soon.
The U.S. Budget must be balanced soon and a plan to pay down the debt must be begun.