As a result of our Federal Government’s inability to cut spending while at the same time extending Bush era tax cuts, our country’s debt is in danger of being downgraded from its triple-A rating.
What it means: future bond rates will necessarily have to go higher. You don’t get to keep selling low-yield debt when your ability to pay it back is universally recognized as not-quite-prime.
Don’t get me wrong: I’m not saying that we should raise taxes. But I am saying that you can’t cut taxes unless you’re prepared to cut expenses. If that seems like an extreme position, then I take that as good news for my gold and silver holdings.
If our elected leaders didn’t see this potential downgrade coming, they should resign in disgrace. They’re simply not fit to govern if they don’t understand that planned-deficit spending has real world consequences. (more)
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