Standard & Poor’s announced Friday night that it has downgraded the U.S. credit rating for the first time, dealing a symbolic blow to the world’s economic superpower in what was a sharply worded critique of the American political system.
Lowering the nation’s rating to one notch below AAA, the credit rating company said “political brinkmanship” in the debate over the debt had made the U.S. government’s ability to manage its finances “less stable, less effective and less predictable.” It said the bipartisan agreement reached this week to find at least $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 not be likely to achieve more savings in the future.
“It’s always possible the rating will come back, but we don’t think it’s coming back anytime soon,” said David Beers, head of S&P’s government debt rating unit.
I am willing to accept and increase in my taxes to bring our financial house into shape. HOWEVER, I will absolutely oppose an increase in taxes until the President and Congress demonstrate a clear commitment to spending control. Until then, not one penny more.
The President owns this. Yes, both parties were spending my money foolishly before 11/08, but I don’t recall hearing warnings from the rating agencies. We are now three years into this Administration, he got his stimulus spending and healthcare bill. [i]He owns this!![/i]
I can’t help but wonder if the trillions of dollars spent on stimulus packages, Tarp and etc. is a more important credit worthiness factor than “political brinkmanshipâ€.
I am not an expert so I have some very basic questions: As I understand it some of the banks, insurance companies, GM Chevrolet, and other companies which were bailed out by these stimulus programs have paid back the money they received and I wonder if the money that was paid back has been used to pay down our national debt? If not what is it being used for? This may be a naïve question but can anyone tell me if there a plan for paying down our countries national debt. I also wonder if it is it possible that Standard an Poor should have downgraded before this became a hot topic for the news media?
[blockquote]I also wonder if it is it possible that Standard an Poor should have downgraded before this became a hot topic for the news media? [/blockquote]
Isn’t the timing irrelevant? No matter when it occured, it would be – and should be – a significant topic for the news media. For the media to downplay such an event would be totally irresponsible.
Nikolaus, I did not realize that my comment could be misunderstood this way, I certainly did NOT mean to suggest that the news media should downplay Standard and Poor’s announcement that it had downgraded the U.S. credit rating. It certainly is a significant topic for discussion regardless of the suggestion that the decision was reached as a result of cangressional “brinkmanship” rather than Standard and Poor’s real understanding of U.S. credit worthiness.
I agree that it is a significant topic for discussion.