Monday, August 8, 2011

S&P Ratings–What We Need, Not What We Want

I hear a lot of noise about the Standard and Poors’ downgrade of the United States current economic standing.  Today, Standard and Poors downgraded Freddie Mac and Fannie Mae and the market is responding again with terror and fear.  Meanwhile, we hear stories that the US Postal Service may be about to default (while running commercials on television that revenue from stamps and services makes them fully viable and self-sustainable).

What does all of this mean?  Is this the end of the world as we know it in the US?

Not at all.

What it does mean is that we are being told by a lot of information sources and very intelligent people that the economic models we have adopted are not sustainable.

Unfortunately, human beings tend to ignore good advice until they are thrown up against the wall and told to listen up or face dire consequences.  Many people who have challenging habits, whether it be poor spending habits, substance abuse or anything else will often continue those habits despite the pleas of others.

“I can’t stop”, they say, “or I will try better the next time”.

Meanwhile, their behavior continues unabated until they finally hit bottom and they are forced to listen to the advice they avoided before.  Unfortunately by then, the pain and loss they have experienced is much worse – they just didn’t know earlier that it could get that bad.

In recent decades, politicians have been elected on the platform of fiscal prudence and responsibility and once in power, it’s “same old, same old” again.  Spending and borrowing continue unabated and the savings that occasionally manifest are trumpeted as large and significant when in fact they are nothing in the big picture.

So instead of being afraid of the Standard and Poors downgrades, let’s look at it for what it really is and, dare I say, be GRATEFUL for it.

It is a wake-up call that what we are doing is not sustainable and doesn’t reflect our potential to do better.  That being said, this is not a time for rhetoric or political positioning – it is a time for action towards strategic, measurable results.

The question becomes:

Are the people in office able to see it this way or will they choose the path that Treasury Secretary Geithner chose the other day when he went on a rant about how Standard and Poors doesn’t understand the mathematics of economics?

There is an old adage, Mr. Geithner, that if it’s you against the world, bet on the world and right now, the world is asking for the US to get its act together.

We are being called to wake up, straighten up and build an economic model that makes better sense for future generations.

We are being called to build a model that extends beyond the next election horizon and is built with the intention of creating a strong future for the citizens of America and the world and not for the politicians who hope to get reelected.

Are we ready to wake up or would we rather wait until the pain gets greater, the stakes are larger and we are REALLY forced up against a wall?

Based on past results, it is easy to assume that we will wait until the warning signs are so loud that we can’t hear ourselves think.

Hopefully, we won’t wait that long.

There is something to be said for being told what we need to hear, not what we want to hear.  Unfortunately we often only see the value in what we were told AFTER the fact.

This is one of those times when we can’t afford to wait until later to see the value of what S&P is telling us now.  We must suck it up and take action now.  Empty assurances, rhetoric and rah-rah speeches just don’t cut it any more and haven’t for sometime.

By taking action now, we will see the wisdom in what groups like the S&P are telling us.

We can thank them later for saving our skins … if we listen to them now.

In service and servanthood,


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