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US loses AAA rating - effect on IT?

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ryansutton
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PostPosted: Mon Aug 08, 2011 3:59 pm    Post subject: US loses AAA rating - effect on IT? Reply with quote

As most probably know the US got their credit score downgraded by S&P. Does anyone think this will affect the IT sector?
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Tom Bair
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PostPosted: Mon Aug 08, 2011 7:33 pm    Post subject: Reply with quote

Being dropped from AAA to AA+, I don't really think we are going to see interest rates raise at all. The problem is investor confidence. As far as IT goes, most likely you won't see equipment upgrading or expansion.

This means that IT hardware sales is going to slump even more, and this will cause equipment prices to rise over the next year or two. Most of the gear will start to come out of China.

You will start to see the Information infrastructure erode a bit within the next two years. Of course, the Government fears this; and may throw funds at it to stop or slow it down.
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ryansutton
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PostPosted: Tue Aug 09, 2011 12:36 am    Post subject: Reply with quote

Tom Bair wrote:
You will start to see the Information infrastructure erode a bit within the next two years. Of course, the Government fears this; and may throw funds at it to stop or slow it down.


This was my feeling as well, this however means in a couple years when confidence is higher there will be a large influx of project work to be had.
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Tom Bair
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PostPosted: Tue Aug 09, 2011 7:13 pm    Post subject: Reply with quote

The problem is that two year gap. Students won't want to opt for a career in a currently stagnant field (although you have to be pretty dumb to see IT as stagnant). So when better times hit and companies want to rush to update; we will be short on trained personnel and equipment manufacturers.

Look at Oregon. Back in the '70's, we started closing out logging of our forests in attempts to protect the endangered species of spotted owl. We lost 80 percent (YES, 80 percent!) of our logging activity since the 70's here in the state. We literally lost an industry.

Where once you would see saw mills spread around the areas of the state, you now have to look really hard to find an active saw mill. Where once you saw dozens of log trucks on the road every day, now you are lucky to see one every two weeks, and that one is often delivering logs to a home owner who is going to cut and split them into firewood.

Think of the amount of jobs lost because of this! Loggers, Log truck drivers, saw mill workers, warehouse supply men providing tools and gear to these guys... all the way down to the cooks and waitresses working at the cafe's who fed the truckers. (Town I grew up in had 3 cafes feeding truck drivers and loggers back in the 60's. All three are gone.)

The good news is the Spotted Owl is no longer indangered. AND, something we did NOT anticipate ... all those saved trees in the forest are acting as huge carbon scrubbers. We got the cleanest air in the United States! So where's all the wood coming from now that Oregon and Washington is no longer cutting down their trees? From Canada. They got tons of it. They don't mind cutting it down and selling it ... they just replant, or; turn it into grazing meadows.

So compare this to the IT industry. For one thing, IT is in all 50 states; not just a few like logging. Consider IT the hand, and look at the fingers ... those are going to be the related industries suffering. It's pretty huge, and Uncle Sam knows it. Having IT fail would be worse than our freeway system going to potholes, although not by much.

We gotta say sorry to the world and start fixing our own problems here at home. Gotta quit giving billions of dollars away to countries in efforts to keep them there and not coming over here. We could spend a tenth of the amount of that bribe money on border security and get greater results!

Okay... I'm off my soap box Laughing It is just that I have been watching the economic flow of this country for the past several years and see that greed is the driving influence in our economy. That puts us in big trouble up the road.
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