America’s debt downgrade is a damning indictment of President Obama’s Big Government disaster

By Nile Gardiner World Last updated: August 6th, 2011
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The decision by credit agency Standard and Poor’s to downgrade America’s AAA credit rating for the first time in 70 years is a massive blow to the credibility of the Obama administration, and a damning indictment of its handling of the economy. No doubt the White House will pathetically try to blame the Bush Administration, Republicans in Congress, and of course its favourite target, the Tea Party, for the move by S&P. But without a shadow of a doubt, responsibility for the country’s financial mess and staggering levels of debt lie with the current US president and his administration. They have been in charge of running the economy for over 30 months, during which time the United States has witnessed an unprecedented increase in government spending and borrowing.

As the Congressional Budget Office revealed In January, the deficits generated under the Obama administration are the largest since the end of World War Two:

The deficits of $1.4 trillion in 2009 and $1.3 trillion in 2010 are, when measured as a share of gross domestic product (GDP), the largest since 1945—representing 10.0 percent and 8.9 percent of the nation’s output, respectively… Just two years ago, debt held by the public was less than $6 trillion, or about 40 percent of GDP; at the end of fiscal year 2010, such debt was roughly $9 trillion, or 62 percent of GDP.

The implications of this debt downgrade are extremely serious, not least with 46 percent of US Treasuries owned by foreigners. As The Wall Street Journal notes, the United States now has a score that ranks “below Liechtenstein and on par with Belgium and New Zealandâ€