4 Most Depressing Consequences of the Sovereign Debt Rating Downgrade

1) Washington plays the blame game

After the downgrade announcement by Standard & Poor's, politicians in Washington almost immediately put their PR activities in overdrive with what seemed like the sole motive of trying to pin the blame on someone.

The Republicans blamed Obama, the Democrats blamed the Republicans, everybody blamed S&P, and nobody really took the time out to accept that there was a real problem. S&P had even made it clear that one of the major reasons for the debt downgrade was that the irresponsible manner in which the debt ceiling debate was handled indicated that the political system was far from efficient in a time when the U.S. needs a strong political system.

Given that the U.S. Treasury came within a couple of days of defaulting on interest payments for its $14 Trillion debts outstanding, a situation brought upon by partisan bickering in Washington, and that a half baked bill was basically just handed in at the last minute to stave off a near term default without any solutions for reducing the budget deficit, and that even after a downgrade, the political system did not attempt to at least discuss options for reducing the deficit, but blamed the agency that cut its rating for making a mistake, it seems to us that S&P had plenty strong reason to at least state that the political system in the U.S. has become too unstable for a sustainable economy.

2) Otherwise Sane People Making Inane Comments

Update: Debt Debacle - Talks go backwards as potential U.S. Sovereign Default deadline looms

Last week, we wrote about the standoff between House Republicans and the President in coming to a resolution to the debt ceiling issue. Well, turns out, almost one week on and not only has there been little to no progress on the issue, but it seems like the discussions have taken a step back from resolution.

While the bigger stories last week rested on the hopelessly unproductive debate between House Speaker John Boehner and Barack Obama, the main story of this week is that of Boehner trying to chalk out a plan that can get the support of fellow Republicans. Seriously Mr. Boehner, one week you're trying to negotiate a solution to to the debt crisis with the President and the next, trying to figure out what your (and your party's) stance on the issue is?

Obama, Republicans keep playing Chicken with U.S. Economy as August 2nd approaches

House Republicans ended discussions on raising the debt ceiling on U.S. government debt in a move that could very soon land the nation in a pretty sticky situation contemplating how to put a spin on defaulting on its sovereign debt.

The debt ceiling is a cap enforced by the Congress to keep a check on Congressional borrowing (and spending) in the same manner a degenerate gambler sets a maximum loss limit for his trip to the poker table. In keeping with the analogy, Congress has the power to arbitrarily increase the debt ceiling when it feels that it should borrow more to stay in the game and ride past its dry spell.