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Xinhua, People’s Republic of China
After Historic Credit Downgrade, Americans Must Mend Ways

What message should the United States government take away from the first credit rating downgrade in its entire history? According to this editorial from Xinhua, the state news agency of America’s largest creditor, the political ‘wrangling’ in Washington must end, and China’s dollar denominated assets must be protected.

EDITORIAL

August 6, 2011

People's Republic of China - Xinhua - Original Article (English)
BEIJING: The days when debt-ridden Uncle Sam could leisurely squander unlimited money borrowed from overseas seem numbered now that its AAA credit rating was slashed by Standard & Poor's for the first time on Friday.

Although the U.S. Treasury promptly challenged the unprecedented downgrade, many outside the U.S. believe the credit rating downgrade is an overdue bill that America must pay for the short-sighted political wrangling in Washington and its burgeoning debt.

Fledgling Chinese rating agency Dagong Global degraded U.S. Treasury bonds late last year, when its move was met with arrogance and cynicism from some Western commentators. Now S&P has demonstrated that what its Chinese counterpart did was nothing but tell global investors the ugly truth.

China, the sole superpower’s largest creditor, now has every right to demand that America address its structural debt problem and ensure the security of China's dollar denominated assets. To cure its addiction to debt, the United States must reestablish the commonsense principle that one should live within his means.

SEE ALSO ON THIS:
People's Daily, China: China Still Has No Choice But to Hold Dollar Assets
Guardian, U.K.: S&P Strips U.S. of its AAA Credit Rating
Die Zeit, Germany: Wealthy Americans Get Off 'Scot-Free'
Die Welt, Germany: The Diminishing Power of Money
O Globo, Brazil: Deal on U.S. Debt Ceiling Shows American 'Strength'
Yomiuri Shimbun: For World's Sake, Obama Must 'Provide Leadership'
CRI, China: U.S. Must Consider 'Defects' in its Democratic System
UNT, Sweden: U.S. Must Choose Practical Patriotism Over Party Tactics
FTD, Germany: Take Decisive Action on Debt Ceiling! Do it, Barack!
La Jornada, Mexico: The 'Grand Debt' of U.S. Families
Jornal Do Brasil, Brazil: American Default and the End of 'Zero Risk'
The Telegraph, U.K.: World Needs America to Come to its Senses
El Pais, Spain: Playing Chicken is the World's Newest Sport
Mainichi Shimbun, Japan: U.S. Must Prevent Another 'Made in U.S.' Disaster
Yomiori Shimbun, Japan: U.S. Lawmakers Should 'Stop Playing Political Games'
Yezhednevniy Zhurnal, Russia: The U.S. and Soviets: Pyramid Builders to Raiders
Frankfurter Rundschau, Germany: 'Radical' Republicans Threaten U.S. with Ruin
Tiscali Notizie, Italy: The Fiscal Decline of the 'Apocalypse'
News, Switzerland: Notion: 'Pay Politicians Based on Performance'
Salzburger Nachrichten, Austria: Debt Ceiling Attack By Republicans 'Backfires'
Gazeta, Russia: America's Astonishing 'Battle for the Ceiling'
People's Daily, China: U.S. Game of Chicken Threatens Creditors and Economy
Die Zeit, Germany: U.S. Risks 'Plunging World' Into New Financial Crisis
O Globo, Brazil: Global Economy Hangs on 'Mood' of U.S. Voters
The Telegraph, U.K.: Down on the Fourth of July: The United States of Gloom
Financial Times Deutschland, Germany: For Americans, a Dour Independence Day
Financial Times Deutschland, Germany: Who Cares about the U.S. Economy?
Folha, Brazil: U.S. Conservatives Threaten to Plunge U.S. into 'Lost Decade'

   

International supervision over the issue of U.S. dollars should be introduced and a new, stable and secured global reserve currency may also be an option to avert a catastrophe caused by any single country.

S&P has already indicated that more downgrades could follow. Thus, if no substantial cuts are made to America’s gigantic military expenditure and bloated social welfare programs, the downgrade will prove only a prelude to even more devastating credit rating cuts, which will further roil global financial markets. Moreover, the spluttering global economic recovery would likely be undermined and fresh rounds of financial turmoil could return to haunt us all.

[Posted by WORLDMEETS.US Aug. 6, 2:35am]