Meehan and Casey call stock plunge a wake-up call

Legislators expressed disappointment over Standard Poor’s recent downgrade of the United States’ credit rating from a sterling AAA to AA+, saying it should serve as a wake-up call.

“As a result of many years of runaway spending and trillion-dollar deficits, the United States lost its AAA credit rating – a credit rating we’ve held since 1917,” said U.S. Rep. Pat Meehan, R-7, of Upper Darby, in a release. “It is my hope that this will serve as a wake-up call to those in Washington that seem to not realize the magnitude of our country’s dire financial situation.”

Meehan said that although the House has worked together to “put the brakes on federal spending” in recent months, “we cannot reverse our situation overnight.”

U.S. Sen. Bob Casey, D-Pa., also expressed disappointment over the downgrade.

“This is a warning call to Washington,” Casey said in an e-mailed statement. “Democrats and Republicans need to put aside partisanship and work together to put the country’s fiscal house in order. After narrowly avoiding default, the compromise deal must only be a first step to responsibly reduce the debt, create jobs and grow the economy.”

Area financial experts are concerned about the downgrade as well.

Brendan Magee, president and founder of Inevitable Wealth Coaching in the Drexel Hill section of Upper Darby, said the credit downgrade will eventually have a ripple effect on the Delaware Valley.

“It’s not going to get better without people feeling some pain,” said Magee.

Magee said local residents could potentially be affected by tax increases and spending cuts to government programs.

“I think in a way it’s a good thing,” Magee said about the downgrade. “It’s a good slap in the face because it’s a wake-up to reality.”

Kelly D. Johnston, an Edgmont resident and corporate executive, said he was not surprised by the downgrade.

“The failure of the president and the Congress to develop a credible path to controlling public debt in the future was the tipping point,” Johnston said. “Frankly, this has been in the works since 9/11 sent our economy into a mini-recession, and both Democrat and Republican administrations and Congresses got into a bidding war with our money. The Obama Administration has hopefully learned that the usual levers that government uses to spark recovery – stimulus, tax cuts and looser monetary policy (cheaper money) – are not going to work this time.”

Johnston, also a former secretary for the U.S. Senate, said the country will have to work its way out of this financial dilemma by reducing the cost of government and reforming the tax system, among other things.

“I think most Americans and Delco residents are looking for political leaders who will stop the partisan gamesmanship and work toward real bipartisan solutions to stopping the growth in our debt,” Johnston said. “The recent deal was barely a start.”

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