What the debt downgrade means...and how to begin to fix the problem.

The debt downgrade by Standard and Poor's is an indication from this credit agency that in their opinion, the United State government has borrowed too much money.  There are a lot of "I told you so's" escaping the lips of Tea Party members at this time.  There are even calls for Geitner to resign from Michelle Bachmann.  But make no mistake, this is no Tea Party victory, and if anyone from the Tea Party is doing a victory dance, they should stop right now.  This is serious business, and every elected politician from the President to every city council member should be in fear of their jobs, Tea Party or socialist and everyone in between.

States and municipalities need to learn to count on less money from the Feds.  This means that there will be cuts in services.  Highway projects and other capital improvements will need to be delayed.

If this does not force the United States into a double dip recession or even a new depression, it may certainly feel like it by the end of next year.  Interest rates for everything will go up.  It will now become more expensive for everyone to borrow money.  And the sellers of every item sold mainly on credit, from houses to computers will have to lower their prices.  The housing market will not recover, the auto industry is in for harder times, and as a result, more layoffs are in the works.  In other words, here we go again.

There is one difference now.  There is a group of people who thought that even in hard times, they had life-long employment.  That is not longer the case.  There can be no denying it now.  Even Federal Government employees now need to fear for their jobs.  Welcome to the real world!

What American needs are jobs.  Employed persons pay taxes.  Unemployed persons draw from the government dole.  The more people paying taxes, the more more reduced the deficit will be.  The best way to fight the deficit is to move people from column B to column A.  We can start by opening up domestic sources of energy.  The oil and gas from domestic sources will not be at the pump for 3 or 4 years, but putting resources into energy production will employ people.  It will not solve the debt problem by itself, but it is a good place to begin.  And we have to begin somewhere, and now would be a good time to start.  In fact, many Federal employees could go to work in the oil business. 

One last thought.  Oil and gas worker are well paid.  They will be paying taxes.  Allowing America's oil and gas industry to expand is indeed a step in the right direction.