• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

United States loses its AAA Credit rating from S & P

Status
Not open for further replies.

mertex

Don't Mess With Texas
DP Veteran
Joined
Aug 25, 2010
Messages
2,382
Reaction score
601
Gender
Female
Political Leaning
Moderate
The United States had just lost its AAA credit rating from S&P, and they have announced that another downgrade may be coming within the next 12/18 months.

The debt ceiling scenario was the chief source of market angst in the last few months, and the GOP was wrong to use it as leverage to achieve some of the things they were demanding. Now the whole country will feel the negative effects. Will others follow S&P?

United States loses AAA credit rating from S & P
NEW YORK | Fri Aug 5, 2011 8:19pm EDT
Aug 5 (Reuters) - 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.

U.S. Treasuries, once undisputedly seen as the safest investment in the world, are now rated lower than bonds issued by countries such as the UK, Germany, France or Canada.

The outlook on the new U.S. credit rating is negative, S&P said in a statement, a sign that another downgrade is possible in the next 12 to 18 months. (Reporting by Walter Brandimarte; Editing by Jan Paschal)


United States loses AAA credit rating from S&P | Reuters
 
Last edited by a moderator:
I just turned to the news.... :(
 
I just turned to the news.... :(

Geez, I wonder how long it will be before most of us start feeling the effects of this downgrade?

It sure doesn't look good - and I'm thinking conservatives think they are going to be able to pin this on Obama!
 
Geez, I wonder how long it will be before most of us start feeling the effects of this downgrade?

It sure doesn't look good - and I'm thinking conservatives think they are going to be able to pin this on Obama!

Can you please stop with the stupid political comments for just a moment. This is a problem but if only one ratings agency has the guts to make this cut it should have minimal effects.
 
They lowered it because congress didnt go far enough to shore up its finances. This is 100% on the fault of the Tea Party and Republicans. They needed to raise taxes on the wealthy and didnt. Now we have this!!!!!!!!!!! :soap
 
The political dysfunctionality that was displayed in abundance ahead of the debt ceiling agreement played a role in the downgrade. In part, S&P declared:

...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.


Standard & Poor's Downgrades US Credit Rating From AAA to AA+ - ABC News

Aside from political dysfunctionality, the long-term sustainable growth rate is probably lower than the 3% figure that has been cited widely on account of a variety of structural issues. If, in fact, that is the case, then tax revenues will grow more slowly than anticipated over the medium-term and beyond, making it even more difficult for the nation to address its long-term imbalances.

Finally, IMO, the U.S. would do well to conclude a credible fiscal consolidation agreement over the next year, preferably prior to the election. If that doesn't happen, S&P will likely carry through with another downgrade. Once downgrades begin to occur, the pace of such downgrades can accelerate if meaningful progress toward addressing fiscal imbalances isn't demonstrated. Ratings downgrades can increase interest rates, making the fiscal challenges even greater. Hence, a vicious self-reinforcing cycle can take hold.
 
Last edited:
They lowered it because congress didnt go far enough to shore up its finances. This is 100% on the fault of the Tea Party and Republicans. They needed to raise taxes on the wealthy and didnt. Now we have this!!!!!!!!!!! :soap

To bad there is no way to only include comments on a topic as important as this from folks who have even a limited amount of economic sense.
 
Geez, I wonder how long it will be before most of us start feeling the effects of this downgrade?

It sure doesn't look good - and I'm thinking conservatives think they are going to be able to pin this on Obama!

It's the weekend, and CNN stopped covering the story... The news report was short and not very informative. Is anybody still covering the story?
 
Coverage is on Fox.

It's reached the point that our government is so dysfunction, that S&P had to step in and tell them to get their **** together. Pathetic Washington, just pathetic.
 
But - will the government listen?

It doesn't look like it. I see no evidence that we're going to change the direction of things - but a lot of evidence that the direction of thing swill continue full force.
 
Fox News stopped their coverage now, and Hannity has resumed.... where is my remote?
 
Why are you guys tuning into 24/7 news - thinking to find some facts hidden in there?

They don't understand **** - the commentators or their 'research' teams.
 
But - will the government listen?

It doesn't look like it. I see no evidence that we're going to change the direction of things - but a lot of evidence that the direction of thing swill continue full force.

Not until a few cities are burning. Then they'll listen.
 
Let me explain why this wouldnt have happened IF the congress raised taxes on the wealthy.....
What did Boehner say he got? 98% of what REPUBLICANS wanted.
Now why did the S&P lower the credit rating?
Because the REPUBLICANS GOT WHAT THEY WANTED!
And the Dems DIDNT!
Now..... go back and read WHY the S&P lowered the credit rating:
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.
 
For those who are interested, S&P has now posted its report explaining the downgrade decision. The report can be found at:

http://www.standardandpoors.com/ser...lobwhere=1243942957443&blobheadervalue3=UTF-8

We lowered our long-term rating on the U.S. because we believe that the
prolonged controversy over raising the statutory debt ceiling and the related
fiscal policy debate indicate that further near-term progress containing the
growth in public spending, especially on entitlements, or on reaching an
agreement on raising revenues is less likely than we previously assumed and
will remain a contentious and fitful process.

So they basically gave our government too much credit, and thought they were capable of solving the debt ceiling crisis in a timely, professional manner. This is embarrassing. I hope the government gets their act together as a result of this.

We also believe that the fiscal
consolidation plan that Congress and the Administration agreed to this week
falls short of the amount that we believe is necessary to stabilize the
general government debt burden by the middle of the decade.

Nothing says our government is broken like this...

I don't even know what to say... :(

It's just going to be an interesting Monday to see the pundits try to spin it, and they probably will try.
 
Why are you guys tuning into 24/7 news - thinking to find some facts hidden in there?

They don't understand **** - the commentators or their 'research' teams.

There aren't many online sources to read yet...
 
the debt-crisis was totally created by the GOP and the Tea-Baggers.

without their games, the crisis would not have happened and we would still be AAA.
 
It's somewhat significant, but not HUGE deal in the big scheme of things, IMHO. The vast majority of people or organizations who invest in Treasury securities are institutional investors who do their own creditworthiness analyses independently of the big three ratings agencies, so the downgrade only really matters to a small portion of investors. In addition, it got down graded ONE NOTCH from AAA to AA+. It's still REALLY GOOD investment-grade material. I mean, I wish my grades were that good :shrug: At the most, this raises interest rates slightly.
 
Last edited:
Don't be so foolish. This cannot be blamed on the Tea Party. Yeah! Let's squeeze a few trillion dollars from the top 1%.... The problem is spending, spending what we don't have. Raising taxes may help (or hurt) but the main problem is spending largely done by Bush and Obama.
 
They lowered it because congress didnt go far enough to shore up its finances. This is 100% on the fault of the Tea Party and Republicans. They needed to raise taxes on the wealthy and didnt. Now we have this!!!!!!!!!!! :soap

:lamo

So raising taxes is the answer? It appears to me that paying down the debt is what's required to keep the AAA credit rating. Sorry friend, but this is Obama's legacy.

http://www.standardandpoors.com/ser...lobwhere=1243942957443&blobheadervalue3=UTF-8

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.
 
For those who are interested, S&P has now posted its report explaining the downgrade decision. The report can be found at:

http://www.standardandpoors.com/ser...lobwhere=1243942957443&blobheadervalue3=UTF-8

We lowered our long-term rating on the U.S. because we believe that the
prolonged controversy over raising the statutory debt ceiling and the related
fiscal policy debate indicate that further near-term progress containing the
growth in public spending, especially on entitlements, or on reaching an
agreement on raising revenues
is less likely than we previously assumed and
will remain a contentious and fitful process. We also believe that the fiscal
consolidation plan that Congress and the Administration agreed to this week
falls short of the amount that we believe is necessary to stabilize the
general government debt burden by the middle of the decade.
 
Μολὼν λαβέ;1059716217 said:
:lamo

So raising taxes is the answer? It appears to me that paying down the debt is what's required to keep the AAA credit rating. Sorry friend, but this is Obama's legacy...

S&P doesn't care if the debt problem is solved with higher taxes. they just want it dealt with.

and don't think for a moment that the American people is gonna forget the games the GOP has played this week.

this is gonna bite the GOP in the ass and Obama will be re-elected.

Obama wanted a $4 trillion plan that cut spending and raised revenue and the GOP said "NO". The American people will remember.
 
Status
Not open for further replies.
Back
Top Bottom