There is quite a bit of confusion about whether or not Standard & Poor is going to lower the country’s credit rating because the White House claims that S&P made some kind of mathematical error in their calculations. It could be that nothing happens at all. But, if we do lose our rock-solid triple-A credit rating, it’s clear that the Republicans are to blame.
Two government officials tell ABC News that the federal government is expecting and preparing for bond rating agency Standard & Poor’s to downgrade the rating of US debt from its current AAA value.
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. The official was unsure if the bond rating would be AA+ or AA.
It should be clear to people that when the country’s credit rating goes down, all of our costs go up. It’s as if we’re the deadbeats. And the Democrats are quite clear that they’re ready to pass a deal with shared sacrifice, which is exactly what the credit ratings agencies want to see. Since they’re not seeing any reciprocation from the Republicans, they assume that we’ll eventually be so overburdened with debt that we’ll default at some point in the near future.
It should also be clear that we’re paying less in personal income taxes as a percentage of GDP than at any time since Harry Truman was president. Obama has cut all our taxes. Any effort to say that he’s a socialist is laughable.
Through their utter recklessness, the GOP has put us on the brink of becoming a second-rate place to invest. They’re turning us into deadbeats, and when we want to borrow money for a house, a car, or to pay for college, we’re all going to be treated like deadbeats.
Make sure to thank your local GOP politician for screwing you so hard just to prevent millionaires from seeing their taxes go up.
So I’m gonna predict some possible reactions to the news.
“well I guess the shit-sandwich, did nothing…Obama fail”
“America’s credit rating never happened under Bush or Republican presidents…Obama fail”
“Bill Clinton would have faough harder and we never would have had this shit-sandwich ass bill…Obama fail”
“GOP are childish, immature, terroist fucks, who decided to blow up the economy out of spite and pettiness, and stark political opportunism…GOP fail”.
I’ll leave it to other to decide which reaction will come from what circle!
I have mixed feelings about this. On the one hand, I’m sympathetic to your criticism. On the other hand, I wouldn’t want to empower conservative critics if the rating’s agencies decided for whatever reason to downgrade US debt if we didn’t carry out severe austerity measures. There would be a difference of course; the Republicans have been completely reckless, needlessly raising doubts about the US’s willingness to pay off its debts. But that difference would be there whether the ratings agencies acted or not, and so I think that recklessness is what we should be focusing on.
First of all, I’m sympathetic to Atrios’s response that we shouldn’t care what these credit rating agencies say because they shouldn’t have this kind of unaccountable power.
On the other, they do have this kind of unaccountable power and so if they say we have a debt problem, we do have a debt problem.
The IMF does this to other countries all the time. We just don’t expect to get treated the same way as some third world country.
Finally, we could avoid this problem by simply promising to do things in the future that improve our position on paper. Whether we actually get around to doing them or not, it would solve the problem.
But the GOP’s power to prevent revenue increases and their evident dedication to exercising that power has now turned us into a joke.
It appears to have happened. We are now rated AA+ (by S&P only.) Who can say if the others will decide to follow.
Oh, what the fuck?
These fucking terrorists deserve to be…
I’ll leave it to your imagination.
The blame has to go on the Republicans. Esp. in the House.
They have really done it this time.
http://tpmdc.talkingpointsmemo.com/2011/08/sp-downgrades-us-aaa-bond-rating-to-aa-outlook-negative.p
hp?ref=fpa
Agree with the first statement, think we should nationalize and liquidate the ratings agencies because of the second. They’re all based in America so just break them because they’re private companies dictating policy.
It really does seem stupid that private non-government agencies should wield such horrendous power.
Especially when they are so manifestly incompetent as we saw in the 2008 crisis. “We rate you AAA even though we can’t understand what you did with your tranches!”
S & P Press Release
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Listed clearly in their arguments, political uncertainty of policy makers in Congress in recent debt ceiling debate and after 2012 elections to reverse policy. Congress screwed the US economy …
"But I will not let myself be reduced to silence."Obama needs to come out with a statement that he will veto any effort to extend the cuts. To date, he has never gone back on a promise to veto something.
At this point, it’s necessary to do so to satisfy the markets.
I just love how they present this political hackery of a press release as being from “Toronto” as opposed to being from Wall Street.
These guys deserve to have their fucking doors busted down by the FBI on Monday morning with a warrant to conduct the long-overdue investigation of how the fuck they rated junk-bonds full of bad mortgages and really really really bad corporate and municipal debt as AAA rated investment vehicles for the last 10 years. All of their files and computers should be confiscated and they should be left standing with their dicks in their hands over this. Let the full prosecution begin.
This SO PISSES ME OFF.
Somebody talk me down.
Maybe we could even get the Mounties to do a coordinated bust-in at their “Toronto” offices as well at they same exact time.
Maybe the MI-5 could do the same in London, also coordinated.
Anyone else? Who in the hell do these (money grubbing scum private sector) people think they are, anyway?
Krugman on S&P’s right to judge.
Just read it.
Krugman is so awesome when he grounds his columns in his knowledge of economics and the financial system, instead of trying to Monday-morning quarterback the field of political management.
Oh and John King is saying that “yes the country has been embarassed and espeically, the President has been embarassed”
And: Obama’s in over his head
Hillary would have prevented this and I just had a thought that Bill Clinton will have advise for Obama.
Thank heavens Bush isn’t the president.
John King is a hack and a fool. Like David Gregory, it amazes me that anyone listens to his Great Village Cocktail Party Wisdom.
Rachel Maddow is doing her usual first-rate job at educating us on this with experts galore.
she truly is. first time I watched Rachel in awhile, but when she gets into “professorial” mode she is bar none one of the best.
Tack onto that the fact that she is responding to a story that is breaking and she is still able to put together the best composite out there.
Oh, yeah Rachel’s great. There’s just no comparison with anyone else on TV.
It’s like she’s doing a different job than everyone else on cable news.
Well shit, I guess that’s it for the “pivot to jobs” that the WH planned to do will be delayed as this downgrade sucks up all the oxygen that the MSM has to breathe!
Politically, this can be beneficial to the administration if they play it right. Congress just went home until after Labor Day and weren’t planning on dealing with the jobs issue until then. August is usually full of crazy news since Washington mostly shuts down.
Right now if Obama has any sense, he will harp DAILY on House Republicans’ failures since taking office and allow the public to draw the arrow pointing at the House Republicans for this mess. Lots of airtime available in August and we won’t have to deal with the missing blonde girl or shark attack bullshit stories that they usually drum up to keep us entertained.
no it’s baby killers this summer. But what’s her name doesn’t seem to be catching on the way missing blonds and shark attacks used to. maybe ppl have real things to worry about this summer.
– what’s interesting is that the S&P seem to be pointing to the repubs unwillingness to increase revenue
If Mr. Bipartisanshit can bring himself to say “This is a Repukeliscum problem”, he might get something out of it. If he does the usual bipartisanshit shit, he will say something like “We all must sacrifice.”
I worry about how he will handle this. He should come out strong against S&P, accusing them of treason, basically. And also slam the Republicans for making a three-ring circus of something as routine as a credit-line increase.
BUT, the guy is so concerned about being LIKED by EVERYONE, even his enemies who wish to defeat him, that he will likely concede that this is the fault of everyone, including the Democrats for their unwillingness to put granny out on the streets so the rich can buy that extra yacht.
It all disgusts me. I don’t know how anyone expects to be re-elected, especially the President, right now.
It’s a tricky issue because we want to make two points that are both at odds with one another, and yet both have some justification. On the one hand, S&P’s actions are suspect, and I would never want this country’s economic policy to be driven by rating’s agencies. On the other hand, Republicans really were insanely irresponsible, and are the reason we are in this mess.
I’d hope this would be something of a wedge issue, that traditional economically conservative Republicans would be horrified with what their party has wrought.
I live in Ireland, and I know what this feel slike. Its basicly a total humiliation, like your country has been downgraded too. I feel your pain as I’ve been right where you are, watching the policies of a bunch of idiots come home to roost and wrecking the economy and knowing all along that it would happen, but not being able to do a thing to stop it.
However, S&P is just one agency. If even one of the others move to downgrade as well then you are really screwed, as I think it takes 2 agencies to make the downgrade “Official.”
The markets are going to explode on monday. Investers were fleeing to “safe” US Goverment bonds all day today.
Just read on Marketwatch that the ratings agency feels that 4 trillion in cuts must be done in the next decade to satisfy them. So it sounds to me like they’re on the “America should commit economic suicide” train by focusing on cutting as the most important aspect of this. Cutting will not fix the deficit, of course, as it will just shrink the economy more. Chasing a falling knife.
On the other hand the assessment of political instability is right on. We have a political party which has as its basic platform vandalism of the US economy. Who the hell knows where that is going to go. That’s a risk.
To be fair,Its not entirely cuts that they are looking at
Yeah, I only saw that after I posted my comment above. I think I was confused because marketwatch was emphasizing the cuts angle…not surprising really.
Apparently, the S&P guys interviewed by AC on CNN said that US could get back AAA rating if we let Bush Tax cuts expire on the rich.
Anyone else see that?
didn’t see that, but did see the emphasis on revenue. seems to me they may be pressuring the republicans on job creation – ??? possible?
http://talkingpointsmemo.com/archives/2011/08/highly_salient.php?ref=fpblg
here it is quoted at tpm
I never thought I’d miss the good old days of the vast right wing conspiracy, but I do. At least then you knew what you were getting and how far they’d go, even if you couldn’t do shit about it. These dumb fuckers truly are leading us down the rabbit hole.
I hope that EACH and EVERY person reading this has written a letter to the local paper, to other papers that you read and to your Repukeliscum reps explaining that this is a REPUKELISCUM FAILURE. WRITE THE LETTER!!
Well, well, well. The GOP mafia’s consigliere carried out the kneecapping anyway.
I guess the GOP didn’t get everything they wanted after all.
Time for another investigation of the ratings industry. It seems that the issuers of credit default swaps and municipal, county, state, and local governments are being held to different financial standards.
Is is gaming the bond market the last paper game in town. Is there nothing left for these bloodsuckers but to actually invest in jobs again? Or will they find or invent another “low risk” paper fantasy.
Did I ever tell you we have the stupidest elites in the world.
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In Washington Congress was debating a political choice, Wall Street and the US rating agencies were looking for economic policy. In fact, the debt deal was conform the wishes of GOP leader Boehner – read his speech here. Boehner tried to convince the men in suits on Wall Street.
The Obama administration was on the right track but failed in the end. A combination of tax revenues and spending cuts would have been the best choice. The US has been on an austerity program for decades since Carter and Reagan years. In Europe there is still fat left to be cut – avg. 40% tax revenues – in the US that’s just not possible. Thus the lonely escape will be through ending the Bush tax cuts and closing loop holes for corporations in using tax havens. Tough choice for Congress, ain’t it?
Once again, the NEW York Times made it all clear in two separate graphs: How the Deficit Got This Big.
SOCIAL POLICY & U.S. POVERTY 1960-1999:
An Economic History [pdf]
"But I will not let myself be reduced to silence."