David McElroy

Most people are accustomed to having something less than perfect credit, but the U.S. government has been considered to be the gold standard — irony intended — of borrowers. It was always believed that no one was more certain to repay debts than the U.S. government. That all changed Friday night.

The rating agency, Standard & Poor’s, cut the federal debt rating from AAA to AA+, which might have a significant effect on the interest that the government pays to borrow its ever-increasing pile of debt. You can read the press release from S&P explaining its decision here.

I’m less concerned about what this is going to mean on Wall Street and in the White House than with what the ripple effects are going to be like for the rest of us. Could this be the beginning of toppling the economic system? It’s hard to imagine that, but I do think things are going to get much worse.

My first reaction is that all of us need to accelerate our plans for providing safe places for our families. The worst might not yet be there, but then again, it might.

In Atlanta, the government-operated school system was caught earlier this year in long-term cheating on standardized tests. Although the Washington Post is a big defender of government schools, even the Post called the details “shocking.”

Teachers, principals and administrators were all caught up in cheating by a system that was said to use fear and intimidation to get teachers to go along with the scheme. (At the same link, you can find links to PDFs of the full state report, which details just how corrupt the system has been.)

The people who are most cheated by this are the students and parents. Students have resources that are supposed to be used to educate them being used instead to finance a world-class cheating operation. Parents who send their kids to schools and see positive test scores believe their kids are getting the education they need, so they have been cheated and lied to. The kids are too young to understand how they’re being cheated, but the parents would be justified in feeling intense rage.

The parents, it turns out, aren’t angry. In fact, at a public meeting Tuesday night in southwest Atlanta, they lined up to sing the praises of their schools and defend the teachers who had been cheating their kids. Seriously. I’m not making this up.

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Early in my college years, I’d never had a credit card. I’d never had a full-time job and I’d also never needed credit. But I was walking through a Sears store at University Mall in Tuscaloosa one day when an attractive girl stopped me to talk. It turned out she was working for Sears, getting people to apply for credit cards.

The pitch was simple. There was some kind of gift — of marginal value, I’m sure — that she would give me if I’d just fill out the application. Plus, she said, she would make some money if I just applied. I explained to her that I wasn’t working and didn’t have any income, so I obviously wasn’t who they wanted. But she said it would help her, so I relented. I’d get a free gift — and how many college boys find it easy to say, “no,” to pretty college girls?

I forgot all about it, but one day before long I received a shiny new Sears credit card in the mail with my name on it. The credit limit was $350, if I remember correctly. What did I do? Did I tuck the card away to use in case I really needed something? Did I hold onto it to use a little here and there to build credit by paying the bill responsibly? No way. I went out that very moment and bought a VCR that I couldn’t afford, maxing out the card in the process.

I spent the next five years or so paying that VCR off, making the minimum payment most of the time and probably paying three times what it was worth.

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