Standards and Poor's has decided to lower the US debt rating from its perfect AAA rating to an AA+ with a negative outlook. The Republicans have manufactured a crisis to achieve ideological ends but, along with that, have forever damaged the US economy. China has criticized the US for their addiction to debt and the downgrade has shaken the stock markets. Most economists agree that this will raise inflation and raise the prices on all goods and services in the US. US dollars are used to trade oil worldwide but this could change if another country seems more reliable.
For what this means to Canadians; our largest trade partner is the US. Much of our remaining trade is to Europe. Both of these economies hang in the balance. There is a great potential for another worldwide recession that may be much worse than the one we were in the process of digging out of. We will have to see what the fallout will look like but so far it doesn't look good.
Perhaps the Republicans have just put the first nail in the coffin of the American empire.
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