Thursday, Aug. 11, 2011 | 2:03 a.m.
I have had responsibility for reviewing and approving lines of credit for businesses. The stress for anyone doing this comes from the personal experience of extending credit to individuals or entities who, without a doubt, have the money to meet their obligations and yet they do not.
They “conserve cash,” make false claims about shipments and quality of goods, cite temporary cash flow problems and/or literally say “the check is in the mail.” Ultimately, their credit ratings are severely downgraded because of one factor — their reputations as chiselers.
Standard & Poor’s was roundly criticized for overrating credit worthiness before our crash a couple of years ago — and rightly so. It has again overrated its target, this time the United States.
S&P aptly stated the rating drop had to do with our demonstration that we would actually refuse to extend our ceiling, thereby defaulting on some of a wide variety of upcoming obligations. Loans, military pay, Social Security — what would be the difference?
President Barack Obama and a host of others stare into the cameras and state that the chance of default is zero. This is not true, and everyone who was watching knows this. S&P knows this. It watched us shut down our FAA with hostage tactics.
Our reputation is now “untrustworthy.” We have elected people who will chisel their creditors for political gain. This is absolutely not AA+ behavior.