This political demonization of S&P for exercising its freedom of speech is just another example of the anti-business policies of the Obama Administration. Whether S&P says that the US creditworthiness has declined or not, the fact remains that it’s the investors who buy treasurys who decide what the interest rate is. If S&P’s opinion is not credible, then they will disregard it. It truly is a case of attacking the messenger.
Dagong, a Chinese credit reporting agency, has already downgraded us twice, once in November and again a few days ago. November was for the “Quantitative Easing” (print more money) and a few days ago for the screams that we would default on debt if the democrat plan was not passed with tax increases. Default should have been never been shouted and should have been explained that creditors would be paid first so default was not in question. But the administration used default in the bully pulpit, spreading it as a consequence just like not paying social security. Never let a crisis go unused even if you create it.
I think people can’t take one more false crisis. Chicken little has a limit.
Here is the Chinese version of Dagong’s reasons.
http://www.chinadaily.com.cn/bizchina/2011-08/03/content_13038588.htm
DK