Standard & Poor: U.S. Uncertainty A Threat to Investors

The US credit rating from Standard & Poor has been downgraded from AAA to AA+ for the first time in history since it attained that rank in 1917. Their words, as noted by Fox News can be found here.


S&P said that in addition to the downgrade, it is issuing a negative outlook, meaning that there was a chance it will lower the rating further within the next two years. It said such a downgrade, to AA, would occur if the agency sees smaller reductions in spending than Congress and the administration have agreed to make, higher interest rates or new fiscal pressures during this period.

In its statement, S&P said that it had changed its view “of the difficulties of bridging the gulf between the political parties” over a credible deficit reduction plan.

S&P said it was now “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 anytime soon.”

Of course, Obama was quick to blame the downgrade on “a negotiation process that took too long and was often too divisive.” Otherwise known as “if I’d gotten my way instantly, and not had to fight the GOP, our rating would have stayed up!”

The GOP counters with a statement that fits more with the S&P’s gloomy outlook on the uncertainty involving our debt dynamics in the near future. Specifically, the S&P believed that as long as no credible deficit reduction plan is enacted, our credit rating will continue to fall. Note carefully…the Dems have proffered no plan and the GOP has!

The GOP blames the Democrats for being intransigent on spending cuts. Which do YOU think had more to do with our lost credit luster. Perhaps those of you who’ve had bad credit ratings can tell us…was it because you spent too much and couldn’t pay your finance charges? Or was it because you spent too long bickering with evil credit card companies who refused to wink and raise your credit limit?


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