Albany reacts to U.S. credit rating threats
Concerns are rising over the national deficit and the United States ability to meet its financial obligations. Now, many are wondering what effect a lower credit rating could have on the local economy â" and on their pocketbooks.
The national debt of the United States currently stands at 9.7 trillion dollars. On Monday, credit agency Standard and Poor's fired a shot across the bow of the nation's financial ship warning that action must be taken to preserve the country's AAA rating.
It's not a decision S&P takes lightly. "Based on projections of economic growth, based on the reasonableness of future budgets, they'll make a judgment as to whether to give a country a tripe 'A' rating," said Economist Aaron Johnson.
A lower credit rating could cause other countries to charge higher interest on the money it loans the United States. The trickle-down effect could lead to higher interest rates across the board for all Americans â" including Southwest Georgians. "If the interest rates increase on those bonds, then mortgage rates will increase so that's going to be burdensome to both businesses and consumers alike," said Johnson.
FOX 31 spoke with local citizens and get their reaction to the deficit issue. Some of them told us they don't see the money being spent inside the United States as a problem. What concerns them is the financial assistance being sent outside the country.
"We have other industrialized countries that are in better financial status than we are but they're not giving the aid to the amount of countries around the world that we do," said Jean Cook.
"I feel if the United States starts focusing more on the United States, then maybe it won't be so bad as it is with the economy and the deficit," said Debra Green.
Others see the matter as one more example of politics-as-usual.
"People are so concerned with supporting their individual party, their own little place, that they're not looking out for the good of everybody," said Laura Wince.
"They're politicians," added Tim Harris. "They have their own issues. They have their own agendas and what they end up having to do is compromise."