The Pain Of It

Standard & Poor's on the defensive. After all, it isn't their fault that the government of the United States has overspent itself into penury, into a situation where paying the interest on their massive debt has beggared the country, is it? And they did warn that if the debt and deficit weren't brought under reasonable control they'd have little choice but to downgrade the country's credit rating.

They were looking for a relatively insignificant, but yet highly significant $4-trillium cut in runaway spending. You know, raise taxes; unpopular move. And, of course, reign in that stupendous spending. It helped no one that there was so much bitter bickering between the Republicans and the Democrats. This is a president, after all, who pledged he would work toward bipartisanship.

Back then, when he was running for election who might have predicted the birth of the Tea Partiers? And it was they, of course, with their rage against the social spending rising tide, who insisted that a hard bargain be fought, bringing the world to the edge of their spectator-seats with suspense and disbelief.

It isn't just an American thing, this overweening debt and frail economic future. This is, after all, the most powerful economic giant in the world, still. An huge importer of goods and services. Whose appetite feeds a lot of the world's economies. And whose ill health financially will inevitably impact on the economies of the rest of the world.

And it isn't just an ailing American economy reflecting the spending habits of an entitled society. That is a way of life emulated by many other countries of the world. The European Union is groaning under the weight of financial failures and bail-outs; Iceland, Ireland, Portugal, Greece. And there's Spain and Italy, with economies too large for a handy bail-out, yet threatening to default.

Canada shudders in anticipation. Its largest trading partner in duress. Canada is in fine shape. Like Israel. Both countries have come through the global financial collapse very well indeed, their finances in good shape, their economies growing, and fairly decent job creation. And each country views their futures with dismay should the U.S. economy go back into full-fledged collapse.

Along with the frail economies of the EU nations. The stock market quails in dismay; stocks, bonds and the equity markets in panic mode. With the downgrade in credit rating to Double A, it will cost the U.S. more to borrow, it will raise interest rates, it will lose more jobs and industry will be enfeebled, trade reduced.

Gold rejoices, currency markets are glum. Canada and Israel, the two countries following the U.S. on the NASDAQ exchange for high tech are hoping to remain untouched. Monday's stock markets may plunge again and everyone will develop one giant, shared migraine.