Financial Credibility Quotes
A minority group of very conservative members of the House of Representatives had decided to hold America’s full faith and credit and the economy hostage to implementing their minority proposal to reduce government spending more than the majority wanted shortly after the 2012 election where the voters had rejected the conservative position. None the less, they were threatening to force the government to default and not pay for the items that the Congress had previously already approved by not approving a debt ceiling increase. The President was determined not to negotiate with “hostage takers” and making sure that America paid its bills for the money spent as authorized by Congress.
This quotation came into play in 2011 when the Tea Party tried to cause the US to default on its debts rather than raise the debt ceiling. Even their unsuccessful attempts caused much loss of confidence for America the world over, violating McKinley’s principle.
The same is true of nations, cities, states and counties. As a result, we often see politicians spinning if not lying about the economic situation of a political entity. If perceived as insolvent, they can rapidly become insolvent. This is also who come counties are so sensitive to the activities of international currency traders. If a large trader or two starts to sell that nations currency, others also sell in fear that there may be a reason for the other selling and a spiral starts. The country if it does not handle this crises well will be perceived as insolvent which then makes the situation worse.
