BakshisMouse
Rookie
- Jun 28, 2011
- 702
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- #1
While the S&P is mostly useless, they did get one thing right about the downgrading of Europe:
S&P | Credit FAQ: Factors Behind Our Rating Actions On Eurozone Sovereign Governments | Americas
There were posters telling me that the reason the S&P downgraded the USA was because of reckless and dangerous deficit spending with no end in sight. I assume those people would want balanced budgets in America now at whatever cost. Now the S&P is telling us that austerity alone cannot solve the problems of Europe. What would those same people say now?
Also, yes, I caught this from Paul Krugman's blog.
S&P | Credit FAQ: Factors Behind Our Rating Actions On Eurozone Sovereign Governments | Americas
We also believe that the agreement is predicated on only a partial recognition
of the source of the crisis: that the current financial turmoil stems
primarily from fiscal profligacy at the periphery of the eurozone. In our
view, however, the financial problems facing the eurozone are as much a
consequence of rising external imbalances and divergences in competitiveness
between the EMU's core and the so-called "periphery". As such, we believe that
a reform process based on a pillar of fiscal austerity alone risks becoming
self-defeating, as domestic demand falls in line with consumers' rising
concerns about job security and disposable incomes, eroding national tax
revenues.
There were posters telling me that the reason the S&P downgraded the USA was because of reckless and dangerous deficit spending with no end in sight. I assume those people would want balanced budgets in America now at whatever cost. Now the S&P is telling us that austerity alone cannot solve the problems of Europe. What would those same people say now?
Also, yes, I caught this from Paul Krugman's blog.