Click here to access article by Yves Smith from Naked Capitalism. (Amended commentary)
This downgrade of US debt is the Empire's way of continuing their neo-liberal war on US society following the recent debt ceiling agreement reached in Congress. Their end game is total capitalist control over everything that is of value to their profit machine. That means smashing the social contracts that have held people together in nation states that previously served the interests of national capitalist ruling classes.
To understand the concept of social contract, one must place it in its historical context. The concept arose to public attention during and after the capitalist revolutions in the US and France in the latter part of the 18th century. It was essentially a deal made by capitalists with the rest of their populations to gain control of society from the aristocracy and monarchy and to promote their hegemony when they were relatively weak. It was mostly an unwritten philosophical position (although made explicit in the US with the addition of the Bill of Rights to the new US Constitution after considerable citizen opposition to its original form), but it informed the policies and public statements of the new ruling class in their relations to their subjects. Essentially, it stated that these new states under the control of capitalists would guarantee and actively promote individual and collective social security, social justice and effective forms of social solidarity.1
Over time and after considerable social strife during the industrial revolution, this thinking evolved into advocating direct assistance to the weaker parts of the population. Also the capitalist state, especially after WWII, would ensure the loyalty of the middle class by providing them with numerous perks and a better income so that they could afford to buy their own homes and maintain a decent standard of living (aka "the American Dream"). In return, all citizens were expected to support their capitalist states and their wars, and not interfere with the rights of private ownership and management over socially produced goods and services.
Following the 20th century and its horrific wars between the competing dominant capitalist states and the demise of one state (USSR) that did not permit private ownership of social enterprises, the US-led empire of capitalists have been trying to establish a global hegemony which some have called a "New World Order". This new political arrangement consists of global capitalists who no longer need nor want national boundaries that interfere with their profit seeking pursuits. (They do like to use boundaries to control working people and to stash their money in tax havens.) They are intent on destroying any elements in societies that impede their profit-making activities such as government regulations, social safety nets, environmental and labor protections. And, they are intent upon extending their control over areas of the planet that resist this domination by using NATO forces to quell opposition.
Privatization is the new key word of the New World Order. They want to "own" everything that has any value. Thus, their almost religious affirmation of "market forces" which must be supreme. Of course, it has been "market forces" that they have used to concentrate so much wealth under their control and for their benefit.
Another core belief was succinctly expressed by Margaret Thatcher who said, "There is no such thing as society. There are only individuals and their families." This provides a rationale to get rid of any social safety nets. This, of course, is a radical change of thinking from the collective sense of security that has sustained and fostered the growth of human populations during the past 150,000 years. Thus, under this new regime one's rights, opportunities, and security will be determined by one's relationship with the ownership of economic enterprises and immediate family, and not with one's neighbors, community, or nation.
Note
1. I don't take a cynical view that people such as Jean-Jacques Rousseau and Thomas Paine were insincere, but I think that they were used by the new capitalist class to deceive workers and peasants. In any era there are a variety of views expressed by people, but only those that serve a ruling class are ones that are permitted to reach large audiences.