Spain Downgraded by S&P

The long-term debt rating of Spain was downgraded by Standard & Poor's, as the European Union flounders on the brink of extinction. And not too soon, I may add.

As for the banking system of Spain, Standard and Poor's said they see it continuing to weaken as the amount of troubled assets increase.

Standard & Poor's cut the long-term rating from "AA" to "AA-." They also have a "negative" outlook on the country, suggesting there could be even further rating cuts in the future. The short-term rating of "A-1+" was maintained for now.

Much of the rating downgrade was predicated on little or no growth prospects for the country, which continues to be weighed down by high unemployment, large private debt and tight credit.

Also of concern is the weakness of its immediate trading partners, which reinforces little or no growth going forward, and possibly contraction.

As with most of the countries in economic trouble, including the United States, the recession is being blamed for Spain's slow growth, while the socialist practices of entitlement and out of control spending weren't mentioned.

Until the size of government is limited, spending cut, and entitlement programs drastically reduced, nothing will change for these countries, as the spending is simply no longer sustainable.

In the case of the United States, they need to also cut back on military expansionism, along with entitlement and spending cuts.

Spain is now expected to grow at an anemic 0.8 percent in 2011, and possibly up to 1 percent in 2012. That's down from former projections of 1.5 percent.

Who knows what will happen once Greece defaults, which is a surety.