Standard and Poor's downgrades US to AA+

[Riot]

..

The U.S. government reportedly expects the rating of U.S. debt to be downgraded by credit rating agency Standard and Poor's, according to ABC News. U.S. debt currently holds a triple-A credit rating, the highest possible.

On Tuesday, President Barack Obama signed an agreement to raise the debt ceiling of the U.S., after a political dispute that lasted for months.

UPDATE 7:10 p.m.: S&P is reconsidering its position on a potential U.S. credit downgrade after the Obama administration challenged the credit rating agency's economic model, CNN reports, citing a senior Obama Administration official, who said the analysis was off by "trillions" of dollars.

Politico's Ben White tweets the supposed errors are said to display "incompetence."

UPDATE 8:19 p.m.: S&P downgrades U.S. credit rating to AA+ with negative outlook, Reuters reports.

This is a developing story.

Thank you, Republicans in the House, for your terrible, incompetent "trickle down" "Reaganomics" fiscal policies, playing around with the fake "debt ceiling crisis" for a month, while you've done nothing at all since your election in January to address the real problem of this country, jobs and growth.

[witchdoctor]

http://www.washingtonpost.com/busine...IxI_story.html

It said the bi-partisan agreement reached this week to find $2.1 trillion in budget savings “fell short” of what was necessary to tame the nation’s debt over time and predicted that leaders would have no luck achieving more savings later on.

S&P’s action is the most tangible vote of disapproval so far by Wall Street on the deal between President Obama and Congress to cut the deficit by at least $2.1 trillion over 10 years. S&P has said that it wanted at least $4 trillion of deficit reduction.


I agree with you Riot. The Republicans caved in and should have been more forceful pushing for bigger cuts.

[clyde]

[Danzig]

you can't lay this all on one party. obama said when he took office that the economy would be his #1 priority. still waiting for the attention required by him and others.
that said, congress is a joke, and has been a joke for quite some time.

at any rate, not surprised, but still wish it hadn't happened...probably never get aaa back.

[Riot]

Originally Posted by witchdoctor

It said the bi-partisan agreement reached this week to find $2.1 trillion in budget savings “fell short” of what was necessary to tame the nation’s debt over time and predicted that leaders would have no luck achieving more savings later on.

There was a deal with $4 trillion, plus tax increases, exactly as S & P outlined in their detail of why they downgraded the rating (and Moody's wanted that, too) That deal was made by Boehner and Obama, and nixed by the Tea Party in the House. Boehner gets to own that failure.

That said, S & P has an SEC problem, as it turns out they may have talked privately to some of their big investors before the downgrade.

Don't forget that S & P is owned by friends of the Bushes.

Of course, we don't have Dodd-Frank, as the Republicans have nixed any closer regulation of Wall Street. Too bad. We have agencies like S & P and Moody's, with their stellar history of rating derivatives, rating us. It will be fun to watch what happens now with Bank of America about to fail, too.

The Republican party owns this. Completely and without question.

[Riot]

Originally Posted by Danzig

you can't lay this all on one party. .

Yes, I can. Who blocked the routine raise of the deficit ceiling, threatening the default of the USA for the first time in history? Who said the full faith and credit of the United States to pay it's bills didn't matter? That nothing would happen? It wasn't the Democrats as a party. Who refused deal with our debt by the necessary and essential revenue increases? Not the Dems.
Which party has successfully screwed the US economy just to try and screw Obama politically? It's the Republicans, who can't control their Tea Party faction.

ABC News:

Official reasons given, one official says, will be the political confusion surrounding the process of raising the debt ceiling, and lack of confidence that the political system will be able to agree to more deficit reduction. A source says Republicans saying that they refuse to accept any tax increases as part of a larger deal will be part of the reason cited.

http://blogs.abcnews.com/politicalpu...downgrade.html

[Rudeboyelvis]

"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," S&P said in a statement.

The downgrade, it said, reflects its opinion that the fiscal consolidation plan which 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," the agency said.

"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."


LOLERZ!!!! From the same organization that gave AAA ratings to the CDO's and the Credit Default Swaps....

It's amazing how some love to immediately blame one side or the other when BOTH have been FUGGING you like ignorant pigs....Hopefully it isn't too late for us to realize that neither party has the best interest of this nation in mind and only their short term personal aspirations...












Nah.... it IS too late...

[Antitrust32]

Originally Posted by Riot

There was a deal with $4 trillion, plus tax increases, exactly as S & P outlined in their detail of why they downgraded the rating (and Moody's wanted that, too) That deal was made by Boehner and Obama, and nixed by the Tea Party in the House. Boehner gets to own that failure.

That said, S & P has an SEC problem, as it turns out they may have talked privately to some of their big investors before the downgrade.

Don't forget that S & P is owned by friends of the Bushes.

Of course, we don't have Dodd-Frank, as the Republicans have nixed any closer regulation of Wall Street. Too bad. We have agencies like S & P and Moody's, with their stellar history of rating derivatives, rating us. It will be fun to watch what happens now with Bank of America about to fail, too.

The Republican party owns this. Completely and without question.

this is so dumb. both parties failed us. You think the repubs own this? Obama is weak and failed you.

[Antitrust32]

Originally Posted by Riot

Yes, I can. Who blocked the routine raise of the deficit ceiling, threatening the default of the USA for the first time in history? Who said the full faith and credit of the United States to pay it's bills didn't matter? That nothing would happen? It wasn't the Democrats as a party. Who refused deal with our debt by the necessary and essential revenue increases? Not the Dems.
Which party has successfully screwed the US economy just to try and screw Obama politically? It's the Republicans, who can't control their Tea Party faction.

ABC News:

the main reason is that we did not cut enough spending and/or increase taxes (or as the dems called it, revenue increase). Both parties failed no matter what you believe. Tea party failed because they wont eliminate loopholes. Obama failed because he did not cut enough or deal with real issues, plus he signed the damn thing and is as weak as anyone i've ever witnessed.

[Danzig]

everything we're confronted with now has been years in the making. the current group of eff-ups couldn't figure out a way to avoid this catastrophe...

and it isn't as tho they suddenly realized a couple months ago that we were coming up on this debt ceiling issue. it should never have been left to go this long, and with a bandaid fix for a hemorrhage.

[Danzig]

Originally Posted by Antitrust32

the main reason is that we did not cut enough spending and/or increase taxes (or as the dems called it, revenue increase). Both parties failed no matter what you believe. Tea party failed because they wont eliminate loopholes. Obama failed because he did not cut enough or deal with real issues, plus he signed the damn thing and is as weak as anyone i've ever witnessed.

half the people polled said they thought there should have been a tax increase as part of the deal...helll, the bush tax cuts shouldn't have been continued-whose fault is that? the lowering off ss take out-whose fault is that? they were allowed to continue because the next election was right around the corner. d.c. is in election mode 24-7, which is why we are where we are. it's our govts fault, regardless of party.
and i agree, i think obama has proved he's no leader.

[Danzig]

from slate:

S&P Downgrades U.S. to AA+, Blames Political Brinksmanship
By David Weigel
| Posted Friday, Aug. 5, 2011, at 10:46 PM EDT

You can do one of two things with the news that Standard & Poor's has downgraded the United States's bond rating, dropping it below AAA status for the first time since 1941. You can stick to your nostroms -- it's the GOP's fault, it's the Democrats' fault, if only we'd listened to the Tea Party, if only Obama had used the 14th amendment -- or you can read what the gnomic ratings agency actually says.

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.

OK: The deal wasn't big enough in the short-term. Advantage, Tea Party.

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.

That statement assigns the blame a lot more broadly. It's Washington's fault. It can't make real deals. Democrats were willing to bend on entitlements during the "grand bargain" negotiations; Republicans were unbending on taxes. The last point is important, because S&P really opens fire on the Republicans.

Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act. Key macroeconomic assumptions in the base case scenario include trend real GDP growth of 3% and consumer price inflation near 2% annually over the decade.

This is not crazy. This what Republicans imply about the supercommittee -- they will not accept plans that increase taxes, and despite the fact that they've agreed to let the Bush tax cuts lapse on January 1, 2013, they are making noises about not accepting a return of the rates. The best possible scenario, if we assume that stance, is what I wrote about today -- tax reform plans that start in the supercommittee and win over a committed Congress.

We actually have all the tools we need to recover the bond rating. The question is whether our political actors do that, or whether they see the openings to craft political narratives. Obama shouldn't have spent so much! (That spending included around $400 billion of tax cuts in the stimulus and $500 billion in the November 2010 Bush tax cut extension.) The Tea Party blew up the process! (More true -- I don't see how the passage of Cut, Cap, and Balance, with its requirement that the states force a Balanced Budget Amendment into effect over the next few years, after which point we need supermajorities for tax hikes... yeah, not quite sure how this gets us out of this!) It's easier to imagine a round or 10 of political point-scoring than, for the first time, some sober assessment of what's going on.

[dellinger63]

Sorry but when you spend like a crackwhore paying people to destroy cars, building railroads no one wants buying up all the bad mortgages, loaning money and thinking receiving 50%-70% back is great and giving away seniors' Social Security money to countries like Egypt and Pakistan your credit rating is bound to go down.

Guess the Dems stated plan of 'spending to prevent going bankrupt' didn't work so well. Kind of like bailing water into a sinking ship rather than bailing it out. And Repubs whimped out once again settling for promises to cut spending rather than actual cuts.

[Riot]

Originally Posted by Antitrust32

the main reason is that we did not cut enough spending and/or increase taxes (or as the dems called it, revenue increase). Both parties failed no matter what you believe.

Nonsense. Obama and Boehner made a deal with those very revenue increases and $4 trillion in spending you speak of, the Dem leadership signed off on it in the House and Senate. Boehner couldn't get it through his Republican House due to the idiots in the Tea Party. The GOP queered that deal. Not the Dems.

So no matter what you believe, or how much you want to blame Obama for being weak (and yes, he is a weak negotiator here) the deal was there, the deal was done, the Republicans screwed the deal up and have sole ownership of this. Along with having sole GOP ownership of making a routine debt ceiling rise into a two-months-long political circus.

The Dems didn't obstruct the debt ceiling increase. The GOP did.
The Dems didn't tie paying our past debt into a nonsensical political circus about future spending. The GOP did.
The Dems didn't refuse to raise taxes or cut loopholes. The GOP did.
The Dems weren't the ones that publicly said that not raising the debt ceiling wouldn't cause any problems, that it was a lie that it mattered, causing the world to think we are crazy and irresponsible about our debt obligations. The GOP did.
The Dems agreed to spending cuts twice as large as the final offer, including entitlements, but the GOP refused it.

The two parties are not the same. Blaming both parties equally just doesn't have any validity in truth.

And the Republicans get extra credit for being irresponsibly stupid, and laying off 94,000 people and costing us $250 million in lost revenues, while holding out for 16.5 million in silly cuts, on their way out of town to vacation

BTW, two Dem senators - no Republicans - showed up to pass a bill that extends the FAA for another month, until Congress gets back to town. So at least those people get to go back to work until this is settled. Thanks to the Democrats.

[Danzig]

just a reminder:


http://www.msnbc.msn.com/id/40675581...bush-tax-cuts/


and based on s&p's remarks, i think if they announced that these tax cuts would be axed immediately, the rating would be back to AAA in no time.

[Riot]

Originally Posted by Danzig

and based on s&p's remarks, i think if they announced that these tax cuts would be axed immediately, the rating would be back to AAA in no time.

Sure it would, just eliminating the tax cuts would cut our deficit in half in about 10 years. It think that is the biggest mistake Obama has made. He did get a little additional stimulus and unemployment for the trade, but the tax cuts would have been the better deal.

However: did you see Cantor on that Crazy Jim Financial guy show? (I think it's on MSNBC) Cantor said unemployment and the economy was the biggest thing right now. So Jim says, "Well, then, you'll extend unemployment benefits?" (because obviously that helps the unemployed and the economy) and Cantor looks puzzled and says, "No"

[Danzig]

i don't watch any of those shows, i'd be too tempted to throw a shoe through my tv screen.

at any rate, our oh so smart leaders need to get together and figure out what to do to grow some jobs, how to encourage the private sector to hire, and how to get people to put their cash to work, rather than shove it into the bank. bony is going to start charging to hold cash, as it's not something they can invest-the depositor might want it back too soon., so they have to have it available at a moments' notice.

[dellinger63]

Repealing the threat that is Obamacare would produce jobs Monday. Private jobs that is and after all they are all that count.

Obama brags he's created 100,000 new federal jobs. So despite the common sense approach the private sector is taking the Fed is hiring and hiring big!

How much does 100,000 jobs and beni's paid for in part by SS withholding cash add to the debt? And this is somehow an accomplishment?

[jms62]

Originally Posted by dellinger63

Repealing the threat that is Obamacare would produce jobs Monday. Private jobs that is and after all they are all that count.

Obama brags he's created 100,000 new federal jobs. So despite the common sense approach the private sector is taking the Fed is hiring and hiring big!

How much does 100,000 jobs and beni's paid for in part by SS withholding cash add to the debt? And this is somehow an accomplishment?

Eliminate H1b Program and give 30 days notice to all H1b's that are on the "hard to get" extentions and you have 1 million + jobs created in a month. Anyone that tells you US workers don't have the skill set is an absolute fukin liar.

[Danzig]

http://www.slate.com/id/2301119/