No More AAA-USA via S&P

AAA the gold standard in debt risk has been stripped by the S&P from the USA as of August 7th 2011 - 8/7/11 - the day the US lost its perfect risk status.

Q1. What does all of this mean to the ordinary man on the street (OMOTS)?

Q2. What does it mean for the US taxpayer?

ANS #1: Since all debt issued by the Treasury is repaid by collection of taxes through the IRS (via the Treasury) and $5 Trillion (and counting) is owned by the FED (see link to CNBC)a lack of AAA will necessitate the US Treasury to INCREASE interest over time.

http://www.cnbc.com/id/29880401/The_Biggest_Holders_of_US_Government_Debt

This will devastate the US economy and cause increasing economic pain for the OMOTS since his mortgage rate, car loan and credit card rates will climb upward.

ANS #2: Taxes will be increased on all levels.

An alternative take on all of this: why should anyone believe in the S&P, the same clowns that rated mickey mouse mortgages as AAA, when in fact they were absolute JUNK. All of this is illustrated in the movie, best oscar documentary 2010 Inside Job
http://www.sonyclassics.com/insidejob/

As far as I can see all of these clowns in S&P were fed nonsensical information and paid hundreds of thousands to ensure that favorable analysis was written and circulated by the "rating" agency to their big clients: Goldman Sachs, Bear Stearns (RIP) and all the other banksters that created the mess.

Rational thinking says do not give any traction to S&P. But markets are nor rational and this morning across the world is chaos. It doesn't matter what the S&P states publically. Dow futures are set to fall and when NYSE opens it will be a slaughter on 8/8/11
http://www.bloomberg.com/archive/news/

Meanwhile, Europe is a mess with ECB buying junk Italian bonds and Spain in a tail spin.

8/8/2011 will be a memorable Monday for sure.

Wake up and smell the coffee folks