Don’t add to the burden
Published 10:09 pm Monday, August 8, 2011
Just when it seemed that the economic news could not get any worse, Standard & Poor’s stepped in on Friday to announce that it has so little confidence in the ability of the United States Congress to reduce spending and get the nation’s debt under control that it was compelled to lower the nation’s credit rating for the first time.
While a credit rating of AA+ might sound like a good thing, the drop from AAA is likely to have major repercussions all over the country and throughout the world. Indeed, on Monday stock market investors made their own pronouncement, and the Dow Jones Industrial Average tumbled 634 points, losing 5.55 percent of its value, even as President Barack Obama spoke to the nation to assure investors that America’s economy will survive.
Having assured Americans that the agreement to raise the nation’s debt ceiling would forestall a stock market collapse and a downgrade of the credit rating, President Obama and congressional leaders now are in the awkward position of explaining how their actions have done anything to improve the nation’s financial standing.
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Suffolk officials say the city was somewhat protected from the financial fallout of the debt-limit crisis by virtue of the fact that the city has avoided borrowing money for the last few years through the Virginia Resources Authority, which helps finance municipal projects in Virginia. Because of the state’s high level of dependence on the federal government, through military and other federal bureaucracies, Virginia — and thus the VRA — is at risk from the debacle at the federal level.
But there are other factors at play that could jeopardize the financial security of people right here in Suffolk. With unemployment on the rise again — back up to a seasonally unadjusted rate of 7.4 percent in Suffolk in June — people all over the city are in their own awkward positions — standing, for instance, between foreclosure and the cost of putting food on the table.
The tough times folks have faced during the past couple of years are likely to get even tougher, and taxpayers will need every break they can get. It won’t be easy for local and state bureaucracies to hold back the tide of requests for extra money after two to three years of comparative austerity, but all signs point to a desperate need for fiscal restraint at all levels of government.
The education, health care, environmental and other lobbies already have begun sharpening their rhetoric in preparation for the budget battles that are expected at the state level in 2012. The same will begin to happen soon at the local level, as City Council and the School Board look at wish lists that have gone unfulfilled in recent years.
Standard & Poor’s examined the recent congressional deal on the debt ceiling and concluded that Washington lacks the intestinal fortitude necessary to make progress on the national debt. In Suffolk and across Virginia, citizens must demand that their local and state officials not add to the burden they already bear from this national nightmare.