By Michael Brendan Dougherty
The CFO of Koch Industries, Steve Feilmeier, took to his company's newsletter to explain the debt downgrade to Koch employees, and offer some subtle digs at Obama.
After explaining what it means to have the U.S. credit rating lowered, he recounts the sad tale of debt.
About $4.5 trillion of the $15 trillion in federal debt is held by foreign investors such as China and Japan.
If the U.S. dollar is worth less in the future, the willingness of those investors to continue lending will decline. The same will be true for anyone – including employees or retirees – who are paid in U.S. dollars.
We've been hearing for years from inflation hawks that the dollar is ready to collapse. But the dollar continues to be a refuge for investors.But Koch industries along with the ratings agencies are losing faith in the dollar or the ability of America to sustain its living standards.
S&P downgraded the U.S. for one primary reason: the potential inability of the U.S. to repay its debts with dollars that will be worth the same in the future as they are today.
If S&P is right, and if the U.S. government does not start living within its means, our standard of living will most certainly decline.
The best first step is to reduce borrowing by cutting actual spending – not just the rate of spending increases. All of us need to understand that our fiscal sovereignty is being compromised and that tough choices are required to reverse this trend. ...
There are currently 17 nations and three territories (Hong Kong, Guernsey and the Isle of Man) with a AAA debt rating from S&P. When the United States of America isn’t on that list, it’s time for change!
And in case you didn't pick up on it - that last line is aimed at President Obama.
Obviously a corporate newsletter isn't going to have a detailed policy platform, but it is pretty easy to suggest "actual spending cuts", without actually saying which spending should be cut.