Over the last few weeks, the airwaves have been saturated with discussions of the debt crisis and the possibility of default on payments. Added anxiety came with the awareness that credit agencies were thinking of a downgrade on our AAA rating.

Writing in Bloomberg on August 3, 2011, Suzanna Kim said the following: “Now that President Obama has signed the debt ceiling deal and averted a default, economists are waiting to see if ratings agency Standard and Poor's will downgrade the nation's credit rating. The uncertainty surrounding the US's now-perfect AAA rating has also thrust the three major ratings agencies into the spotlight, raising questions about the significance and boundaries of their credit assessments.”

 

Moody's Investors Service affirmed its AAA U.S. government bond rating, though it lowered its outlook to negative.

"The initial increase of the debt limit by $900 billion and the commitment to raise it by a further $1.2-$1.5 trillion by year's end have virtually eliminated the risk of such a default, prompting the confirmation of the rating at AAA," Moody's stated in a report.

While I was writing this reflection it was being reported that the Dow Jones Industrials dropped over 500 points; a tragedy by the worst standards. The economic news around the world is also very bleak. Among the European block of nations, Greece, Ireland, Portugal, and Italy have already been bailed out or are approaching the possibility of default.  It suggests a world in trouble. People are looking for someone to blame. And they name careless homeowners, voracious mortgage lenders, naïve consumers, ravenous bankers, greedy corporate chiefs and irresponsible politicians.

The S&P credit outlet was not as confident as Moody’s however, and lowered its rating of the US to AA plus, which caused Congress and S&P to point blame towards each other. As a result, the stock market plunged over 630 points on August 8, 2011.

At stake in all this is not only interest rates the US must pay on its $14.4 trillion debt, but a host of rates for consumers, from mortgages to car loans to credit cards. A downgrade of US debt would cause interest rates of all kinds to edge up and that would cost the US and consumers billions of dollars. The stock market plunged partly on worries about this possibility.

There is enough blame to go around, but I offer up that there is more to what is going on than just to blame. It seems to me that there is a sinister hand that defies the analysis of ordinary economic theorists, which reminds me of the words of Jesus, “Do not store up for yourselves treasures on earth, where moths and vermin destroy, and where thieves break in and steal. But store up for yourselves treasures in heaven, where moths and vermin do not destroy, and where thieves do not break in and steal.” (Matthew 6:19, 20).

Yes, what we are facing is beyond our ordinary minds to analyze. We are surely in need of divine help. From all that we are seeing, we need to take the time to, “Look up and lift up our heads for our redemption is drawing near.”