Merged Credit downgrade threads

[Truthmatters]

http://www.ndtv.com/article/world/s-ps-statement-why-us-credit-rating-was-cut-from-aaa-to-aa-124654


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.


if the tea party had not used a debt ceiling vote in a political way they would not have downgraded us.


its what they said

 

[bripat9643]

Won't you right-wing nutters be surprised by S&P's justification for the downgrade. Will you accept the reasoning?

Where have they mentioned Republicans, the TEA party or the debt ceiling debate?

 

[Toro]

From Standard & Poor's

Overview
· 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. ...

Rationale
We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the
general government debt burden by the middle of the decade. ...

The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting
agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.

Our opinion is that elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden in a manner consistent with a 'AAA' rating and with 'AAA' rated sovereign peers ...

Standard & Poor's takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.'s finances on a sustainable footing. ...

We view the act's measures as a step toward fiscal consolidation. However, this is within the framework of a legislative mechanism that leaves open the details of what is finally agreed to until the end of 2011, and Congress and the Administration could modify any agreement in the future. Even assuming that at least $2.1 trillion of the spending reductions the act envisages are implemented, we maintain our view that the U.S. net general government debt burden (all levels of government combined, excluding liquid
financial assets) will likely continue to grow. Under our revised base case fiscal scenario--which we consider to be consistent with a 'AA+' long-term rating and a negative outlook--we now project that net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 79% in 2015 and 85% by 2021. Even the projected 2015 ratio of sovereign indebtedness is high in relation to those of peer credits and, as noted, would continue to rise under the act's revised policy settings. ...

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. ...

Our revised upside scenario--which, other things being equal, we view as consistent with the outlook on the 'AA+' long-term rating being revised to stable--retains these same macroeconomic assumptions. In addition, it incorporates $950 billion of new revenues on the assumption that the 2001 and 2003 tax cuts for high earners lapse from 2013 onwards, as the Administration is advocating. In this scenario, we project that the net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 77% in 2015 and to 78% by 2021. ...

When comparing the U.S. to sovereigns with 'AAA' long-term ratings that we view as relevant peers--Canada, France, Germany, and the U.K.--we also observe, based on our base case scenarios for each, that the trajectory of the U.S.'s net public debt is diverging from the others. Including the U.S., we estimate that these five sovereigns will have net general government debt to GDP ratios this year ranging from 34% (Canada) to 80% (the U.K.), with the U.S. debt burden at 74%. By 2015, we project that their net public debt to GDP ratios will range between 30% (lowest, Canada) and 83% (highest, France), with the U.S. debt burden at 79%. However, in contrast with the U.S., we project that the net public debt burdens of these other sovereigns will begin to
decline, either before or by 2015.

Standard & Poor's | Americas

 

[bripat9643]

if the tea party had not used a debt ceiling vote in a political way they would not have downgraded us.


its what they said

They said nothing of the kind, dirtbag.

 

[bripat9643]

Only a DimoRAT would claim spending like there is no tomorrow is not "dysfunctional," and trying to put a stop to it is.

The failure of Congress to get DimoRAT spending under control is the reason S & P downgraded government bonds.

According to what I've been reading and watching this morning... I had a gig last night with the band, so I didn't even hear about it till I woke up.... is that the downgrade wasn't about our debt. It was about our dysfunctional Congress and the ridiculous fight to raise the ceiling.

Compound that with the fact that people like Ryan, McConnell and the like are calling for that battle EVERY TIME the ceiling needs to be raised. So they want to make that dys-functionality a permanent part of the way we do business.

Congrats, Tea Party... this one's on you.

 

[Dot Com]

The t-publicans won, if you want to call it that.

 

[Dot Com]

wonder why she calls them "CHEAP" political points? turns out she's wrong and the Tea Party is right. you dimocrat assholes have spent way more than you could afford.. I guesss cheap is when it's someone else's money huh?

None of that is defense either eh WT? No Repubs are enrolled in Medicare either eh? Certainly you aren't correct?

 

[eflatminor]

All of you guys are wrong. Our credit rating has NOT been downgraded! I know this because Tim Geithner said there was "no chance" of a downgrade if we'd just raise the debt limit, which we did. What, are you going to tell me that a Washington DC bureaucrat is completely full of shit?

 

[Neotrotsky]

Won't you right-wing nutters be surprised by S&P's justification for the downgrade. Will you accept the reasoning?

Where have they mentioned Republicans, the TEA party or the debt ceiling debate?

The Great Liberal mind
hears many things in it

 

[Zoom-boing]

Why S&P cut US credit rating was cut from 'AAA' to 'AA+'



Here is a press release issued by S&P that explains the reasons behind its move:

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.

What Congress passed was a joke and merely kicked the can. If the D.C. cronies (BOTH sides) don't get their shit together we will be downgraded again.

To avoid a downgrade, S&P said the United States needed to not only raise the debt ceiling, but also develop a "credible" plan to tackle the nation's long-term debt.

John Chambers, head of sovereign ratings for S&P, said the slowness at raising the debt ceiling and the political infighting led to its decision. In announcing the downgrade, S&P cited "political risks, rising debt burden; outlook negative."

World reacts to U.S. credit downgrade - CNN.com

 

[CrusaderFrank]

In 2006, Obama told us that raising the debt was a sign of "Failed Leadership" Under the leadership of Obama and the hyperdrive spending of the Democrat Congress, we have not only lost our AAA credit rating, but we also learn that Social Security benefits cannot be paid unless we're able to borrow more.

Obama was presented with a sane, adult plan to lead us back to fiscal sanity, he rejected it. His one and only goal was to secure the unfettered ability to borrow until the end of his one and only term. The Capital Market reacted swiftly as did S&P.

He got that, and we got downgraded. We have a Failed Leader as POTUS. Obama, the Downgraded President.

merged with existing downgrade thread.

 

[Truthmatters]

You are a hopeless partisan

 

[CrusaderFrank]

You are a hopeless partisan

"The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. ... It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our government's reckless fiscal policies." -- Barack Hussein “Shovel-ready was not as … uh .. shovel-ready as we expected (laughs)" Failed Leader Obama

 

[Neotrotsky]

With Downgrade, time to remove boondoggle of ObamaCare off the back of the US economy


Indeed,
with the Left mantra of "more tax more tax", they say PapaObama is off the table

Even CBO says PapoObama Care kills jobs

CBO Says ObamaCare Will Kill 800,000 Jobs
[ame=http://www.youtube.com/watch?v=Jskjci1ZL9Q]‪800,000 Jobs Gone: CBO Admits Health Care Law Will Kill Jobs‬‏ - YouTube[/ame]

Some studies have shown that PapaObama care is having a real impact on
killing jobs NOW

Analysis: Job Growth Was 10-Fold Higher Before the Democrats Passed Obamacare

“Private-sector job creation initially recovered from the recession at a normal rate, leading to predictions last year of a “Recovery Summer.” Since April 2010, however, net private-sector job creation has stalled. Within two months of the passage of Obamacare, the job market stopped improving. This suggests that businesses are not exaggerating when they tell pollsters that the new health care law is holding back hiring.”

Sherk writes that Obamacare “discourages employers from hiring in several ways: ​

 

[Dont Taz Me Bro]

We have lived through decade after decade fine with a much higher tax rate on the wealthy.

Time to raise their taxes.

I'm fine with that as long as we raise yours to the same level you advocate for them.

 

[Neotrotsky]

With Downgrade, time to remove boondoggle of ObamaCare off the back of the US economy


Indeed,
with the Left mantra of "more tax more tax", they say PapaObama is off the table

Even CBO says PapoObama Care kills jobs

CBO Says ObamaCare Will Kill 800,000 Jobs
[ame=http://www.youtube.com/watch?v=Jskjci1ZL9Q]‪800,000 Jobs Gone: CBO Admits Health Care Law Will Kill Jobs‬‏ - YouTube[/ame]

Some studies have shown that PapaObama care is having a real impact on
killing jobs NOW

Analysis: Job Growth Was 10-Fold Higher Before the Democrats Passed Obamacare

“Private-sector job creation initially recovered from the recession at a normal rate, leading to predictions last year of a “Recovery Summer.” Since April 2010, however, net private-sector job creation has stalled. Within two months of the passage of Obamacare, the job market stopped improving. This suggests that businesses are not exaggerating when they tell pollsters that the new health care law is holding back hiring.”

Sherk writes that Obamacare “discourages employers from hiring in several ways: ​

 

[Neotrotsky]

With Downgrade, time to remove boondoggle of ObamaCare off the back of the US economy


Indeed,
with the Left mantra of "more tax more tax", they say PapaObama is off the table

Even CBO says PapoObama Care kills jobs

CBO Says ObamaCare Will Kill 800,000 Jobs
[ame=http://www.youtube.com/watch?v=Jskjci1ZL9Q]‪800,000 Jobs Gone: CBO Admits Health Care Law Will Kill Jobs‬‏ - YouTube[/ame]

Some studies have shown that PapaObama care is having a real impact on
killing jobs NOW

Analysis: Job Growth Was 10-Fold Higher Before the Democrats Passed Obamacare

“Private-sector job creation initially recovered from the recession at a normal rate, leading to predictions last year of a “Recovery Summer.” Since April 2010, however, net private-sector job creation has stalled. Within two months of the passage of Obamacare, the job market stopped improving. This suggests that businesses are not exaggerating when they tell pollsters that the new health care law is holding back hiring.”

Sherk writes that Obamacare “discourages employers from hiring in several ways: ​

 

[Soggy in NOLA]

Just another nail in the coffin of the Obama regime.

It's over.

 

[Dont Taz Me Bro]

wonder why she calls them "CHEAP" political points? turns out she's wrong and the Tea Party is right. you dimocrat assholes have spent way more than you could afford.. I guesss cheap is when it's someone else's money huh?

Let's be fair here. The Republicans are just as culpable. They are still responsible for the majority of our national debt, although it won't take long for Dems to pass them up.

 

[Truthmatters]

Why S&P cut US credit rating was cut from 'AAA' to 'AA+'



Here is a press release issued by S&P that explains the reasons behind its move:

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.

What Congress passed was a joke and merely kicked the can. If the D.C. cronies (BOTH sides) don't get their shit together we will be downgraded again.

To avoid a downgrade, S&P said the United States needed to not only raise the debt ceiling, but also develop a "credible" plan to tackle the nation's long-term debt.

John Chambers, head of sovereign ratings for S&P, said the slowness at raising the debt ceiling and the political infighting led to its decision. In announcing the downgrade, S&P cited "political risks, rising debt burden; outlook negative."

World reacts to U.S. credit downgrade - CNN.com

Yes they did kick the can down the road.

The thing is the road they used to kick the can down was a road never traveled before.

You see the TEA Party USED a tactic that had NEVER been used before.

They held the Amreican people hostage to their demands.


The financial system now knows this rule of the past (dont mess with the debt ceiling vote) has now been breached.

Listen to the tea party people like Mitch McConnal, he thought it worked great and is looking for more hostages.


That is what SP talked about in their release.