Posted on 08/05/2011 9:28:50 PM PDT by freespirited
• 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.
(Excerpt) Read more at guardian.co.uk ...
It was just to satisfy the Democratic base.
What did Obama & the obstructionist Senate say?
Harry Reid: "Over, Done, Dead"
White House: "Duck, Dodge and Dismantle."
Take the people who provide the revenue down first - then the government will crash instead of slide into oblivion...
OK, it seems to me that a lower rating that suggests even a slightly higher risk will require a higher return to match the increased risk. I am no expert but it seems to me that a bond worth less results in a higher return.
Let me ask you and all others reading this a question.
Moody’s, S&P Caved In to Ratings Pressure From Goldman, UBS Over Mortgages
Is S&P too big to be held liable? No one cares that it appears there is proof that S&P was one of the “key enablers of the financial meltdown” that led to this mess?
No one cares that S&P could well be the Arthur Andersen of the bond ratings industry?
Personally their holier-than-thou attitude is wholly annoying!
Obama wanted to bring this fight over wealth transfer to an international crisis and that is why he threatened to default on the US debt if he did not get his tax increases.
The limo liberal bankster community agree with Obama and are using the political show down to prop up his demand for heavy taxation. They wanted socialized medicine, too, so corporations would not be saddled with this employee benefit. They want heavy income taxes on the middle class to pay for it and the debt.
I think this is an internationalist political battle against the people of the US because we continue to defeat their efforts. For example, we rejected their global warming scam and their self-serving solution - UN taxation (carbon trading) and their new carbon commodies “market.” We won’t buckle under the international court. We bristle at them using our military as they choose. We won’t accept open borders and shira. We created a political backslash when they dipped into the Treasury and Fed for their own profit.
This is economic punishment against Americans for disobeying their internationalist superiors and being uppity Americans. If you don’t want your economy to crash, do what we say politically.
I think you have some excellent points. Even without an all-powerful cabal there are enough one-world advocates who will use their “bankster community,” international and U.S. government influence to, as the 1960s radicals (spoiled brats) used to say, “Bring it all down, man.”
Ping
I know they mean "revenues" as a synonym for raising taxes. But, given the long historical evidence that revenues change as a result of the status of the economy, and not as a result of tax rate changes--wouldn't "raise revenues" properly mean "improve the economy"?
No doubt the “sixties” radicals are in power now - in government, nonprofits and business and globally. What unites them is a Marxist utopian belief structure and a sense of superiority that always accompanies megalomaniacs. We have been watching them operate and resisting them for a long time. They arrived.
Not really, the two don't have a correlation like that. A bond that is worth less is simply worth less and will take a harder sell to get someone to buy it. People will gamble one high risk stocks for a chance at a higher return but there's no guarantee, the return may be lower or negative.
I don't see a plot from great banking bogeymen, but a serious symptom of failed socialist policies here and abroad.
So Standard and Poor’s is now in the business of legislating the USA? I think not.
I think nothing would have averted the downgrade... the “crisis” was in the works by those who planned it.
I believe you are correct. Unfortunately there are many who believe revenue equals taxes alone.
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