Posted on 08/05/2011 6:16:35 PM PDT by Iam1ru1-2
The United States lost its top-notch AAA credit rating from Standard & Poor's on Friday in an unprecedented reversal of fortune for the world's largest economy.
S&P cut the long-term US credit rating by one notch to AA-plus on concerns about the government's budget deficits and rising debt burden. The move is likely to raise borrowing costs eventually for the US government, companies and consumers.
"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," S&P said in a statement.
The decision follows a bitter political battle in Congress over cutting spending and raising taxes to reduce the government's debt burden and allow its statutory borrowing limit to be raised.
On Aug. 2 President Barack Obama signed legislation designed to reduce the fiscal deficit by $2.1 trillion over 10 years. But that was well short of the $4 trillion in savings S&P had called for as a good "down payment" on fixing America's finances.
The political gridlock in Washington and the failure to seriously address US long-term fiscal problems came against the backdrop of slowing US economic growth and led to the worst week in the US stock market in two years this week.
The S&P 500 stock index fell 10.8 percent in the past 10 trading days on concerns that the US economy may head into another recession and because the European debt crisis has been growing worse as it spreads to Italy.
“Well, so is our credibility is shot as well.”
You said it. We are being played for higher taxes on the “rich”. Socialist definition of “rich”: Anybody with a job.
This on the day I get my annual property value notice. Down another 24 thousand. From $254,000 to the new $230,000.
The high water mark in 2007 we were sitting at $325,000.
Good thing we aren’t planning to sale.
My sentiments too.
That is the original effect. From it a come the necessity of truly reducing real spending in order to keep from adding to the Debt at a much higher rate. If we continue to spend at the same rate with higher interest rates then the rates will go yet higher as the "rating" is downgraded further. It simply is the next leg up on Collapse because the political class WILL NOT rein in real spending. No departments will be eliminated, etc. If we do cut spending sufficient that we seem to be paying off a tiny corner of the Debt it will make no difference in the not very long run because all those Departments and Agencies and Bureaus will still be there. It is like Fat cells in your body. As you stuff yourself unto obesity your body creates additional fat cells. As you seriously diet and exercise and lose weight those fat cells get smaller and you appear to be thinner but you have all those extra fat cells and you can't get rid of them without Surgery. As soon as you relax your diet-and-exercise regimen those fat cells grow back and more new ones are created to ride along with them.
Or McRomney.
We are very vunerable right now. Our enemies are happy. Especially obama.
I guess now where The Great Sat-n, what with the removal of that last A.
correction: I guess now we’re The Great Sat-n, what with the removal of that last A.
Market watch is quoting someone who says this is the Tea Party downgrade. ... Wolf Blitzer said it.
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