Sense on Cents

Living beyond one’s means is not a path to long-term prosperity. While America is still the greatest nation on earth in so many regards, a glaring problem within our society is the predilection of our government to think that massive deficits do not have real implications. Washington politicians are forever spending what we as a nation do not have in order to maintain their own positions of power. That is a path to mediocrity, if not worse.

Who is sending a warning shot today across our fiscal brow on this most important of topics?

The credit rating firm Moody’s. The New York Times highlights Moody’s warning about our future financial and economic landscape by writing, Credit Agency Warns U.S. and Others of Risk to Top Rating:

Major Western economies have moved “substantially” closer to losing their top-notch credit ratings, with the United States and Britain under the most pressure, Moody’s Investors Service said Monday in a reminder that the global debt crisis is not limited to the small or weak.

The ratings of the Aaa governments — which also include Germany, France, Spain and the Nordic countries — are currently “stable,” Moody’s analysts wrote in the report. But, it added, “their ‘distance-to-downgrade’ has in all cases substantially diminished.”

“Growth alone will not resolve an increasingly complicated debt equation,” Moody’s said. “Preserving debt affordability” — the ratio of interest payments to government revenue — “at levels consistent with Aaa ratings will invariably require fiscal adjustments of a magnitude that, in some cases, will test social cohesion.”

I don’t deny that our government needs to step in and support our economy at this juncture; however, we need to be fully cognizant that both the increased debt and the increased time we are utilizing to address our fiscal problems comes with an ever increasing cost. What is that cost? Higher interest rates to service the debt. Who pays? Future generations.

When will our society demand that we live within our means? When will society hold our politicians to account for wasteful spending? When will our media, charged with exposing the waste and the politicians, actually uphold their task?

Congress has the rating that it warrants, but ultimately the problem is ours. If we as a society do not create the change we need, then we become the nation we deserve.

Is this the best we can do?

LD

This entry was posted on Monday, March 15th, 2010 at 3:37 PM and is filed under Deficit, General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.