Full story here: http://money.cnn.com/2011/08/05/news/economy/downgrade_rumors/index.htm?hpt=hp_t1
Before anyone packs up all the ammo and moonshine they can carry and heads for the hills, let's take a moment to think all this through.
First, yes, this is unprecedented in American history. Not during the Great Depression, not during stagflation in the 70s, not under any other recession in our history have we lost our AAA bond rating. This is not a good thing. It demonstrates the complete and utter failure of government to manage the world's largest economy, and the nearly unimaginable sums of money it generates.
Second, this is a klaxon call to action to fix the problems with government spending. Nonwithstanding how banal it is to talk about the meaning of the Chinese character for crisis, this is the time for reform. Lots of people may have to eat their peas, but that's hardly the worst that could happen.
Third, let's look at the Great Depression with perspective. It was an awful economy, to be sure, but the majority of Americans did not lose their homes, did not go hungry, and did go to work every day. History tells us that the current storm will likely last several years, but that prosperity will return after a time. We would all do well to remember that going forward.