USA Financially Downgraded

It has come as a surprise to some that S&P has chosen to downgrade the USA to AA+ from AAA rating. The US had held its high ratings for the last 94 years and now its sovereign bonds will no longer be considered risk-free. Apart from the financial implications, its the pschological impact which is equally worrisome. Any financial pundit will find it easy to surmise that this could easily trigger another recession. Is it not a continuation of the before? For so many decades, the world saluted the American spirit of free enterprise, probably rightly so. Default leadership of the world naturally followed. However, if stifling of merit and private enterprise was the bane of communism, the proclivity for insatiable and inexorable greed is the inherent weakness of capitalism. At least, it would seem so now.

It was only in September 2008, that the US was hit by the submprime mortgage crisis and soon enough the US belly lay exposed awkwardly to the world at large. The vast majority of Americans since then have had this growing realisation that it will never be the same again. Their hard-earned pride had been inflicted a heavy blow. The latest events will only serve to exacerbate their sense of loss of identity.  

Nevertheless, this is no occassion to rejoice for the rest of the world. The world today is economically connected like never before and the effects will sooner or later start to engulf the other continents in relative degree.

For the nonce, one can't help but reflect benevolently on the lessons learnt from Indian culture and its education system. Bromides such as lalach buri bala hai and jitni chadar ho utna pair phelao, which our parents and teachers kept grilling us with are more meaningful than ever before. The new generations which has picked up American values and beliefs in rebellious disregard of their childhood learnings, might want to stop a while and ponder!

It would seem now that a new world order needs to emerge. The Russian dream has failed, the Americans are failing, the Europeans will only follow suit albeit slowly and the Indians are as confused as always.

So, is it time to stop deprecating the Chinese model of growth? Before you start to agree, one needs to remember, a China rose is not really a rose.