After the recent Republican party scandals that lead to the multiple candidate dropouts and last night's State of the Union from President Obama, now is a better time than ever to bring up this topic: What has President Obama done for our economy, and what do the Republican candidates plan to do for the economy as well?
The video above raises the question "How good or bad is the United States credit rating? According to President Obama in this video clip, last August the United States' credit rating was downgraded by another country. If I learned anything in high school economics, it would be that the U.S. dollar has downgraded in value from previous financial loans from other countries during world wars and other economic hard times. But is that what he means when he said other countries doubt our supposed AAA credit rating. Now, if you are like most people I know, including me, you may be unaware of what the United States' credit rating is and what it means to be a "AAA" country. Why is having an AAA rating so important to us as a country, and why do we need to let other countries know that we are? Let me put it in terms that we can all understand.
Let's say that Australia wants a financial loan to help pay for increasing their grapefruit imports from the United States. According to this article from MSNBC, Australia has a AAA credit rating. What this means is that Australia has demonstrated it's ability to pay back the loan, no doubt about, in the past. They have a plethora of natural resources and have managed to keep their economy stable even when the world is struggling. This is, of course, just an example. I have no idea about Australia and their grapefruit quantities.
Here's another example: Maybe you have a lemonade stand and you want to borrow some money from Jimmy because his cupcake and coffee stand is making loads of money. Can Jimmy trust that you will pay him back? Well, if you have a AAA creditability with him, I'm sure he will.
Both of these examples are about credibility a person or a country has with another. Paying off your debts looks great on any economy, big or small. Trust and financial stability are key in being AAA.
With that being said, it doesn't look good on anyone to appear to not know how to handle our debt as a country. I understand that the President said that this didn't mean that our credit rating was bad, but rather how we dealt with it was seen as a bad decision. My point is that with or without the future presidential debates bringing up the question of the United States' financial credibility, it is important to know where we stand. As an American, now I want to know how our country's true credibility, both politically and financially.
How will this downgrade affect our futures?
For more videos like this one, visit the AAA Country channel on Filmannex.
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