Standard & Poor’s Downgrades U.S. Credit Rating for First Time in History
Posted on August 5, 2011 at 8:44pm by Tiffany Gabbay
WASHINGTON (The Blaze/AP) — Credit rating agency Standard & Poor‘s says it has downgraded the United States’ credit rating for the first time in the history of the ratings.
The credit rating agency says that it is cutting the country’s top AAA rating by one notch to AA-plus. The credit agency said late Friday that it is making the move because the deficit reduction plan passed by Congress on Tuesday did not go far enough to stabilize the country’s debt situation.
A source familiar with the discussions said that the Obama administration believes S&P’s analysis contained “deep and fundamental flaws.”
The Wall Street Journal published the following press release from S&P that claims it could be downgrading the U.S. again to a AA. In addition, the S&P statement says the downgrade reflects “our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 201:”
– We have lowered our long-term sovereign credit rating on the United States of America to ‘AA+’ from ‘AAA’ and affirmed the ‘A-1+’ short-term rating.
– We have also removed both the short- and long-term ratings from CreditWatch negative.
– The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.
– More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.
– Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government’s debt dynamics any time soon.
– The outlook on the long-term rating is negative. We could lower the long-term rating to ‘AA’ within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.
-------------------- Buy Low. Sell High. Posts: 10754 | From: The Land Of The Giants | Registered: Feb 2005
| IP: Logged |
posted
I only caught part of the interview, but Barney Frank was talking about how such a downgrade could effective exclude U.S. Treasury Bonds from many pension plans that only allow AAA purchases. Does anyone have additional information on this?
quote:Originally posted by Peaser: Anyone running for president who voted against this latest deal in Congress just got a boost in the polls.
yep, the TParty just won a major political victory because the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011"
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
| IP: Logged |
posted
I hope everybody remembers John Boehners famous words after the debt package was signed,I got 98% of what I wanted. Now thats a real moron.
-------------------- Wise men learn more from fools than fools from the wise. Posts: 3827 | From: beautiful California | Registered: Sep 2008
| IP: Logged |
posted
this administration just doesnt get it. in 2012 they will say obama just needs more time, money, debt, and spending to get the economy going again. what else can he do? everyone keeps buying into their excuses and giving him more and more passes.
-------------------- It isn't so much that liberals are ignorant. It's just that they know so many things that aren't so. Posts: 6949 | Registered: Apr 2004
| IP: Logged |
quote:Originally posted by jordanreed: lets all dumb it down to cows level...............moo!....where can i poop?..oh!!..here?...ok..thanks.
obama will win the next election...you know it..I know it ...we all know it!!!!
Of course he will....look at the following he has created.....
Now if just the taxpayers could vote we might have a different result.
Gold at $1708
omg, many democrats who have been in office for numerous years are blaming the TEA PARTY for this crisis. Thats when you know they are so far gone and cant accept responsibility for their actions.
Posts: 6949 | Registered: Apr 2004
| IP: Logged |
quote:Originally posted by CashCowMoo: [QUOTE]omg, many democrats who have been in office for numerous years are blaming the TEA PARTY for this crisis. Thats when you know they are so far gone and cant accept responsibility for their actions.
no doubt that both sides will blame the other cash, but even you admit we need to raise taxes.
I listend carefully to the S&P interviews this weekend, and i read the S&P's statements.
we are still borrowing too much with only the 2.4 trillion in cuts.
The S&P would not clearly state that raisng taxes was an imperative, but hey most certainly did say that the lack compromise was a major part of th reason.
the lack of compromise is the TParty plan. they clearly admit and are proud of it and Beohner said he got 98% of what he wanted, that is not compromise.
when it is actually time to cut spending? nobody wants their budgets cut.
when it is time to cut "regulations"? nobody wants to risk buying unsafe food and cosmetics at the store. nobody wants their drinking water to be dirty, nobody wants their money at the bank to be unsecured by the FDIC.
fact is? without the bailouts that Bush did? we would have had to pay more money in FDIC payments than we did for the TARP and the Obama stimulus combined and that would not have even covered all the losses... Bush knew this the GOP and teh Dems in Congress knew this, the average person don't know and don't care.
the TParty should also know this, but i amnot convinced they have enough common sense or intellect to grasp this concept or anything half as complicated.
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
| IP: Logged |
posted
go back to April and read the first S&P statement, they warned all of the "lawmakers" pretty clearly:
On April 13, President Barack Obama laid out his Administration’s medium-term fiscal consolidation plan, aimed at reducing the cumulative unified federal deficit by US$4 trillion in 12 years or less. A key component of the Administration’s strategy is to work with Congressional leaders over the next two months to develop a commonly agreed upon program to reach this target. The President’s proposals envision reducing the deficit via both spending cuts and revenue increases.
Key members in the U.S. House of Representatives have also advocated fiscal tightening of a similar magnitude, US$4.4 trillion, during the coming 10 years, but via different methods. House Budget Committee Chairman Paul Ryan’s plan seeks to balance the federal budget by 2040, in part by cutting non-defense spending. The plan also includes significantly reducing the scope of Medicare and Medicaid, while bringing top individual and corporate tax rates lower than those under the 2001 and 2003 tax cuts.
We view President Obama’s and Congressman Ryan’s proposals as the starting point of a process aimed at broader engagement, which could result in substantial and lasting U.S. government fiscal consolidation. That said, we see the path to agreement as challenging because the gap between the parties remains wide. We believe there is a significant risk that Congressional negotiations could result in no agreement on a medium-term fiscal strategy until after the fall 2012 Congressional and Presidential elections. If so, the first budget proposal that could include related measures would be Budget 2014 (for the fiscal year beginning Oct. 1, 2013), and we believe a delay beyond that time is possible.
Standard & Poor’s takes no position on the mix of spending and revenue measures the Congress and the Administration might conclude are appropriate.
But for any plan to be credible, we believe that it would need to secure support from a cross-section of leaders in both political parties. If U.S. policymakers do agree on a fiscal consolidation strategy, we believe the experience of other countries highlights that implementation could take time. It could also generate significant political controversy, not just within Congress or between Congress and the Administration, but throughout the country. We therefore think that, assuming an agreement between Congress and the President, there is a reasonable chance that it would still take a number of years before the government reaches a fiscal position that stabilizes its debt burden. In addition, even if such measures are eventually put in place, the initiating policymakers or subsequently elected ones could decide to at least partially reverse fiscal consolidation.
obviously the lawmakers all failed. But when Boehner says he got 98% of what he wanted? that pretty much says it all..
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
| IP: Logged |
quote:Originally posted by IWISHIHAD: It looks like the market is being smacked again.
Sure seems to me that this is a get back at Obama more than anything else.
Many still think that the market is that great indicator of how our economy is doing, it use to be a lot more than it is these days.
If the market was the great indicator, we would have never gotten above 6000.
-
some of the politicians will try to blame Obama, but it's not really about him. It's as much (actually more) about the Euro as it is about the Dollar..
the markets have been "looking for an excuse" (any excuse) to do this for 2 years now. I'm surprised it took this long...
here's the 'thing" tho...
dropping the ratings chnaged how big players have access to leverage, and the drops over the last weeks will most likely force alot of selling because of leverage. Thye are not as leveraged as they were in '08, but they are still highly leveraged. as this drop conitnues, they will be forced to sell more and more. I beleive that the people behind the S&P ratings have had this planned for a year. Of course they had to be able to justify doing it, and th eonly justification they needed was no tax increases..... There was no way they were going to find 4 trillion in cuts alone to Govt spending. In macro-economics? You are often damned if you do and damned if you don't.
keep imind that even withth e dewongrade? The markets are buying up US Grade AA+ plus debt faster than they ere when it was AAA- think about that for a minute, do you smell the rat?
somebody is making money hand over fist that money is not evaporating into thin air.... There is a short somehwere just raking it in.
one of th ethings everybody seems to have been ignoring is oil.. it is dropping like rock, and let's hope it keeps droppping to 50 or even 40 and people stay out of it (keep the price down) for a long time to come. Our economy is not nearly so much in danger from Govt debt as it is from oil being too high..
look at how much of our trade deficit is caused by oil imports
u
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
| IP: Logged |
quote:Originally posted by Peaser: I wonder when the next downgrade will come, as we will revisit raising the limit again in about two years or less?
This proposal merely raises the debt 7 Trillion MORE in the coming 10 years...
What will the prices of foods and goods be then, as they have just barely begun to rise?
"just begun"? LOL, i stll remeber 26 cent a gllon gasoline and cars csoting less than 2 grand, and i'm not really old yet Peaser, it has been going on since forever,a nd will not stop no matter what you want.
when i was born bread cost a nickel a loaf... a quarter got you movie or even two and candy
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
| IP: Logged |
posted
The next "stimulus": A classic case of The Road To Hell Is Paved With good Intentions.
-------------------- It isn't so much that liberals are ignorant. It's just that they know so many things that aren't so. Posts: 6949 | Registered: Apr 2004
| IP: Logged |
quote:Originally posted by CashCowMoo: The next "stimulus": A classic case of The Road To Hell Is Paved With good Intentions.
we've been on the road to hell since Bush cut taxes and took US to a couple of wars. Some of US pointed this out at the time and were actually made fun of. Even called unPatriotic. When Bush said was our Patriotic Duty to go shopping- i was just plain dumbfounded- how we could have such an idiot for fearless leader. Fact is both parties have spent more than they took in since Reagan came up with Trickle down economics cash. That was his plan, the Great Conservative beleived that the Govt should borrow money and make it available to the wealthy who would then let it trickle down to US Peasants...
well, it didn't trickle down, it trickled OUT!
Stimulus was needed to keep food on our shelves, what's needed now is for people to stop making up bedtime stories about why we are int his mess and roll up their sleeves and get to work. The GOP isnt doing any better at that than the Dems are.
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
| IP: Logged |
posted
I love how the economic numbers and options keep getting worse and running out. At the same time you have sheep who blindly follow Obama/MSNBC and act as if everything is getting BETTER.
-------------------- It isn't so much that liberals are ignorant. It's just that they know so many things that aren't so. Posts: 6949 | Registered: Apr 2004
| IP: Logged |
quote:Originally posted by CashCowMoo: I love how the economic numbers and options keep getting worse and running out. At the same time you have sheep who blindly follow Obama/MSNBC and act as if everything is getting BETTER.
right, because Fox news says it will get worse unless we elect their candidate...
this country is doomed because so many people think exactly what they are told to think and you are one ofthem
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
| IP: Logged |
yep, he said that in so many words, and that is the prevailing attitude amongst the Conservatives. They would rather see our Country fail than be led by the other side.....
it is impossible to lead the unleadable. the Conservatives have proven over and over agin now that they would rather lose thier country than lose control.
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
| IP: Logged |
posted
the most hysterical part in all of this is that the "Conservatives" refuse to even take *credit* for their leaders-
Good example is Reagan the Great, he created the dreaded Progressive Tax system we have today that is "unfair" to teh wealthy
he also began the deficit spending situtatio that has gone outofcontrol.. when he took office? Our debt was under a trillion$ when he left? It was over 3 trillion
he raised the debt limit 18 times? what a Great Conservative!
Let's not forget that he *ran* when the Marine Barracks got bombed either
Then you have Bush the First read my lips..LOL....sheesh
then you have Bush the Fearless Leader, he was a good wittle consewvative util he wrote up the TARP which the Conservative either run away from or hang on Obama. or both when they have an audience dumb enough to buy it, which they usually do.... TARP fell under Obama's budget debt,not Bush's, cuz he passed it as he was leaving the office
you have to be almost illiterate to buy into "popular conservatism" today, and the intellectual conservatives are actually very nervous, they should be cuz they are become exticnt.
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
| IP: Logged |
posted
I dont want to see Obama fail, and I dont agree with the Tea Party wanting to block anything and everything. Very immature to not be able to work with others. That is why I never have or will associate myself with the Tea Party. I just cant stand the way liberals scream about Bush, then when someone talks about Obama the way they dont like they resort to childish name calling like tea baggers or whatever. Then the Tea Party...which the left claims is irrelevant and so pathetic...then they turn around and BLAME the Tea Party for failures. They put the TP on a level of having great influence and a voice, right after they go a few rounds discrediting them as nothing! I mean its hilarious to watch MSNBC sometimes and how frustrated they get over it. Why is it MSNBC commentators are always getting in trouble for such foul or offensive statements? Do you see that on Fox News...I mean FAUX News....right?
-------------------- It isn't so much that liberals are ignorant. It's just that they know so many things that aren't so. Posts: 6949 | Registered: Apr 2004
| IP: Logged |
posted
Do you see that on Fox News...I mean FAUX News....right?
cash, you amaze me, you have heard of the Owner of Fox being in trouble for the phone hacking right?
it didn't go down at Fox News specifically YET, but the owners son is expected to be indicted
By LUCHINA FISHER July 19, 2011
The Murdoch dynasty may be coming to an end.
James Murdoch, considered the heir apparent to his father Rupert Murdoch's media empire, may be forced to resign or, worse, could face arrest as News Corp's phone hacking scandal continues to unravel.
as to the general bad statemenst made at Fox that no-one get into rtouble for? i would say that is more because Fox has looser morals clauses in their contract than NBC does...
you can hear somebody get rude on Fox every night just like you can on MSNBC now... MSNBC had more class a few years ago, but not anymore..
at least they don't pretend to be fair and balanced
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
| IP: Logged |
quote:Originally posted by CashCowMoo: I dont want to see Obama fail,
this i just couldn't pass on either... you do see Obama fail all the time, even when he hasn't...
i'm not beholden to the guy any more than i was beholden to Bush when i voted for him in '00-
i voted for him but if/when he screws up In My Opionion? i'll say so...
The Patriot Act was and still is a POS signed by both of them
so far, the worst thing Obama's done IMO is to cave in to the right wingers too easily...
it's not as tho he's done anything great, but then i never expect anything great from any politician.
i'm, surely not going to blame him for not being able to get anything doen with people that are commited to seeing him fail no matter how bad that hurts the country as a whole, and we have quite few of them on Fox News talking non-stop everyday ...
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
| IP: Logged |
quote:Originally posted by CashCowMoo: I dont want to see Obama fail,
this i just couldn't pass on either... you do see Obama fail all the time, even when he hasn't...
i'm not beholden to the guy any more than i was beholden to Bush when i voted for him in '00-
i voted for him but if/when he screws up In My Opionion? i'll say so...
The Patriot Act was and still is a POS signed by both of them
so far, the worst thing Obama's done IMO is to cave in to the right wingers too easily...
it's not as tho he's done anything great, but then i never expect anything great from any politician.
i'm, surely not going to blame him for not being able to get anything doen with people that are commited to seeing him fail no matter how bad that hurts the country as a whole, and we have quite few of them on Fox News talking non-stop everyday ...
It is our entire culture, its going to crap and nothing can be done to stop it. You can fight it and tackle it here and there, but overall this snowball will be an avalanche. We are now far more accepting into our culture lower standards for behavior.
Posts: 6949 | Registered: Apr 2004
| IP: Logged |
posted
cash change happens individual by individual. you have been challenged here many times to open your eyes. Obma gets blamed for adding 3 trillion to the deficit but Obama himslef has actually spent very little more money than that which he was charged to spend by the laws that were in place when he took office. The one thing that i know he has spent alot of money on was extended unemployment benefits..
changing those laws would have just given his opponents somethign DIFFERENT to betch about- Obama could have lowered the deficit by cutting Govt jobs, and adding more people to the unemployment lists. that will be happening bnow after the TParty did it's thing... teh States were using the obama stimulus to keep teachers adn cops intheir jobs and that is now over and we will see more and more laid off over the next year...
I beleive we are going to see 10% cuts pretty much across the boards over the next thre or four years... that will mean jobs lost.
Obama could have let GM get sold to the Chinese. GM has paid back a good chunk of that already
He could have done nothing on health care (but he ran on doing Something) sure, what he and Congress ended up doing was a mess, but it can be fixed over time, and the gOP COULD have made that mess a lot tidier had they played the game straight instead of just saying no after actuall writing a bunch of the parts of the bill...
How much the health care bill adds to the deficit or kills jobs is highly opinionated not fact. Fact? The employers of this country NEED to have the task of providing health care to their employees made easier if not completely taken off their hands for competitions sake...
i know there's a myth that the govt cant do anytng right, but we all know they actually win a war once in awhile among other things...
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
| IP: Logged |
UBBFriend: Email this page to someone!
Printer-friendly view of this topic
![[Wink]](wink.gif)
![[Mad]](mad.gif)
![[Big Grin]](biggrin.gif)
