The Standard & Poor’s downgrade of the US credit rating is simply a sooner, rather than later scenario.

American taxpayers, unaccustomed to prudent government financial policies, will protest the austerity cuts needed to address the current debt crisis. It is inevitable that the administration in office at that time will cave in to prop up its declining popularity, and the country will spiral into bankruptcy. This is not a maybe, it is a certainty, so S&P is merely the first to downgrade US debt implements, but it won’t be the last and an AA+ rating will likely be the best that can be hoped for.

There is a lot of debate as to what Standard & Poor’s downgrade of US debt means. What should be debated is why the other rating agencies have not downgraded US debt as well. These are the same credit rating agencies, including S&P, that overrated securities until they collapsed in 2007, driving an already unbalanced economy into a deep recession it has yet to recover from. So are any of their ratings worth the paper they are printed on? I think not, and further believe there is more politicking, lobbying and personal profiteering involved in agency ratings nowadays than sound economic analysis.

However, the Standard & Poor’s downgrade is important. It means that even credit agencies no longer considered infallible, even competent, can see the writing on the wall it is so obvious. I say obvious, because major tax cuts for corporations and the rich that have been in place since the 1970s were further enhanced in 2000. This resulted in reduced revenues for Washington. One would need to be blind not to recognize that costly global wars, especially those entered into since 2000, increased government spending.

The financial fiasco that was allowed to unfold and resulted in bailouts of dysfunctional banks, insurance companies, large corporations and the economy itself since 2007 further increased government spending. Again, all of this added spending is occurring at a time when there is less tax revenue being paid by corporations and the rich than at any other time in history. So naturally the US government has to borrow to make up the shortfall, and will continue to do so, thus making it look like a risky borrower to all but the most dull witted lenders.

The new debt ceiling deal agreed to by President Obama and the Republicans in Congress guarantees further increases in the national debt in years to come. The deal did not address any of the major causes of the debt crisis, it simply agreed that more debt could be created to dig a deeper hold. For me personally, the politicking by both parties did little more than confirm that the corporations and the rich keeping their tax cuts, and continued subsidies and government orders were all that was at stake. It was about money and power being retained by the rich and powerful, and nothing more. Both parties gave lip service to concerns about the debt of course, but the real debate was how much of a cut to government spending to the American people could be made, what would not be taken from the rich and powerful, while all the time focusing on the 2012 election.

Standard & Poor’s had no choice but to downgrade the US national debt because the economic and political reality in the US guarantees there will be further increasing of the nation’s debt and a certainty of a default in the future. Thus a political and financial disaster is just over the horizon for lenders who purchased debt obligations of the US, Treasury securities. The majority of Americans will not accept a greater economic crisis that will further increase unemployment, home foreclosures, reduced real wages and job benefits, but bring on cutbacks in government supports. There will be a public backlash, followed by government concessions or outright capitulation, which will impact the creditors of the US once the inevitable default occurs.

When will the American population demand taxes stop going to paying interest owed to creditors? When will the electorate demand their political leaders stop supporting corporations, coddling the rich, and giving aid and support to foreign goverments that are friends of the US plutocracy? When will the American voter demand their taxes pay for public services that the people need? I predict it will happen sooner, rather than later. These exact same domestic dangers for creditors of Greece, Portugal, and other countries prompted debt downgrades. The S&P is only the first downgrade of US debt, but I am convinced other credit rating agencies will have no choice but to follow the S&P lead if they wish to be seen as creditable in the eyes of lenders the world over.

S&P simply announced what any reasonably intelligent onlooker knew to be fact. What puzzles me is why only Standard & Poor’s has stepped up, because as any politician or business leader knows, once the obvious becomes obvious, you need to make an announcement?