Friday, August 5, 2011

S&P Downgrades US Credit Rating

Reuters is reporting that Standard & Poor's is downgrading the credit rating for the US from AAA to AA+ with the agency also saying that it might not be done and could lower it once again in the next 12 to 18 months.
The United States lost its top-notch AAA credit rating from Standard & Poor's on Friday, in a dramatic reversal of fortune for the world's largest economy.

S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about growing budget deficits.
ABC News is also reporting that major reasons for the downgrade include Congress's holding the debt ceiling negotiations hostage for political gain as well as the GOP's refusal to accept any tax increases that could be used to help offset the mounting debt.
Official reasons given, one official says, will be the political confusion surrounding the process of raising the debt ceiling, and lack of confidence that the political system will be able to agree to more deficit reduction. A source says Republicans saying that they refuse to accept any tax increases as part of a larger deal will be part of the reason cited.
Next time you see your adjustable rate mortgage or credit card interest rate jump due to the higher cost of borrowing make sure you thank your local tea party member.

UPDATE: Standard and Poor's statement regarding the credit downgrade.
The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year’s wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.

11 comments:

  1. Sorry, that dog don't hunt, no matter how badly you wish it did. The Tea Party pushed for the minimum $4 trillion in cuts we knew for weeks it would take to avert a downgrade. But no, oh no, Leftists just had to keep their precious unconstitutional welfare state intact.  I hope you're happy now. This is 100% at the feet of the Democrat Party with a bow tied around it.

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  2. Sorry I guess you can't read can you. S&P stated the reasons included the hostage taking with the debt ceiling negotiations as well as the reluctance to raise taxes both Tea Party bullet points. Cuts are all well and good and needed but without revenue increases they don't solve the problem.

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  3. I read very well.  Apparently it's YOU who can't read.  Nowhere in S&P's statement is blame placed on not raising taxes.  The story you cited only says " A source says Republicans saying that they refuse to accept any tax increases as part of a larger deal will be part of the reason cited."  Sorry, Leftist politicians or whatever liberal "source" they sought out doesn't count as a legitimate, unbiased source.  Besides, raising taxes--which are already too high--would only put further drag on an already hurting economy.  You Marxists are so vengeful against people who are successful, you don't care if you bring down the whole country so long as you get your injection of class envy.

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  4. This directly from S&P not from any government officials:
    It appears that for now, new revenues have dropped down on the menu of policy options.

    So directly from S&P we have reasons including political brinkmanship, i.e. debt ceiling being held hostage and no policies for new revenues, i.e taxes. Of course they do mention cutting entitlements but those were on the table during the "negotiations" whereas new taxes never were.

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  5. You might recall that when we were warned about the potential for downgrade, no mention whatsoever was made of increasing taxes, only of making cuts.  The statement from S&P mentions revenues, but clearly concentrates on the out-of-control spending that congress did nothing about as the primary reason for the downgrade.  They told us: cut at least $4 trillion or you'll be downgraded. The spenders in Washington looked them in the eye and said, "Up yours. I dare you to lower our rating" with that farce of less than $1 trillion in cuts.  


    Now we got what we asked for.

    I hope you're happy. 

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  6. Actually Obama proposed $4 trillion in cuts early on in the process including deep cuts in Medicare and Social security but the GOP refused to go along because it also included higher taxes so don't place this on the Dems. The plan that finally was agreed upon was Boehner's with the Constitutionally questionable cuts to the military thrown in as a carrot for the Dems if further cuts aren't made later.

    So in reality I hope you are happy. You held us hostage and we all lose....

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  7. Yeah, but gutting defense (which pales in comparison to unconstitutional social spending) and jacking up taxes that would kill the economy.  You'd think this stupid Marxist would realize after two years of utter failure in his economic policies to listen to some real Americans who believe in the free market system that made us the greatest nation in history.  


    Sorry, killing the country to get a fake $4 trillion in cuts that will never materialize doesn't work in the real world.

    But since when have liberals ever lived in the real world. It was your fantasies (remember Tim "Tax Cheat" Geithner on Tuesday: "We will not be downgraded.")  

    Keep dreaming. You'll soon realize you've manufactured a nightmare with your fantasies.

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  8. The facts remain Bob
    - S&P did lower our rating, - S&P did say that the political grandstanding and failure to seek revenue increases was a big part of the reason for the downgrade.- The Dems were at least willing to put entitlement cuts on the table but Republicans refused to compromise in any way by talking about taxes-  The bill that finally did pass to raise the debt ceiling including the limited amount of cuts was Boehner's baby.So you can call us Marxists, cheats, late for dinner, or whatever other adjectives you have in your vocabulary to deflect away from the point, it won't change the fact that the GOP owns this one.

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  9. Ellis is in too giddy a state to deal with simple declarative sentences.  He is still in a state of exuberance over the recent success of his political movement in Norway.

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  10. I think we both know that no entitlement cuts ever would have materialized. You Marxists would sooner cut off your hand than take a single brick out of your glorious welfare state.  

    Nope, the Left owns this lock, stock and barrel. The raters said cut at least $4 trillion and you couldn't be bothered. Shoving your dead-end failed ideology down the throats of the American people was more important than the health of the nation...as usual.

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  11. Newquist, you're full of it as usual. So desperate for anything to prop up your bankrupt worldview, reality (as always) is optiona: http://www.dakotavoice.com/2011/07/breivik-a-conservative-christian-terrorist/

    It must really suck to be a Leftist and always be on the wrong side of history and reality.

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