President Obama ran out of HOPE
Time has come for real CHANGE
Vote out Obama/Pelosi in 2012
S&P Downgrades U.S. Credit Rating for First Time in History: Worrisome or Meaningless?
SodaHead News
2011/08/06 03:30:02
|
|
|||||
|
411 votes
|
|
72% | |||
|
85 votes
|
|
15% | |||
|
75 votes
|
|
13% | |||
After the markets closed on Friday, Standard & Poor's (S&P;) announced that it was downgrading the U.S. credit rating (from AAA to AA+) for the first time in the history of the ratings.
S&P;, one of the "Big Three" credit rating agencies, along with Moody's Investor Service and Fitch Ratings, issues credit ratings for the debt of private and public corporations (including governments). The agencies analyze risk, and award a rating that is supposed to reflect the borrower's ability to repay its loans.
AAA borrowers are considered the best quality in terms of reliability, stability, and low risk. The next level down, AA borrowers, which are divided into AA+, AA, and AA- categories, are considered quality borrowers that are slightly riskier than AAA.
When announcing the U.S. rating change S&P; stated, "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."
Commentators are split over what the downgrade will mean for the U.S. and the world economy. Some say it will have significant negative impacts, while others argue that it is essentially meaningless.
Those who think it matters say: the downgrade will ignite a chain reaction that will cause interest rates to rise. This will raise the cost of borrowing across the system, in turn depressing the economy.
On the other side of the fence, those who claim the downgrade is meaningless say: credit ratings are generally used to assess unknown borrowers. However, everyone knows the health of the U.S. government and, now that the debt deal has passed, nobody believes it will default any time soon. Thus investors, who may not usually be inclined to buy or keep AA debt, may make an exception for the U.S.
What do you think? Is the S&P; downgrade of the U.S. credit rating worrisome or meaningless?
S&P;, one of the "Big Three" credit rating agencies, along with Moody's Investor Service and Fitch Ratings, issues credit ratings for the debt of private and public corporations (including governments). The agencies analyze risk, and award a rating that is supposed to reflect the borrower's ability to repay its loans.
AAA borrowers are considered the best quality in terms of reliability, stability, and low risk. The next level down, AA borrowers, which are divided into AA+, AA, and AA- categories, are considered quality borrowers that are slightly riskier than AAA.
When announcing the U.S. rating change S&P; stated, "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."
Commentators are split over what the downgrade will mean for the U.S. and the world economy. Some say it will have significant negative impacts, while others argue that it is essentially meaningless.
Those who think it matters say: the downgrade will ignite a chain reaction that will cause interest rates to rise. This will raise the cost of borrowing across the system, in turn depressing the economy.
On the other side of the fence, those who claim the downgrade is meaningless say: credit ratings are generally used to assess unknown borrowers. However, everyone knows the health of the U.S. government and, now that the debt deal has passed, nobody believes it will default any time soon. Thus investors, who may not usually be inclined to buy or keep AA debt, may make an exception for the U.S.
What do you think? Is the S&P; downgrade of the U.S. credit rating worrisome or meaningless?
Read More: http://www.washingtonpost.com/blogs/ezra-klein/pos...
Top Opinion
-
Fef 2011/08/06 04:43:51
Consider this: If you were spending more than you earn what do you think your credit rating would be?
Whether or not the country spent more than it earned is not an issue. It also is not an excuse for refusing to pay its debts. It has nothing to do with the US credit rating. The bills are paid when they become due is the issue.
Our credit rating was not downgraded because we borrowed more money than we took in. It was downgraded because it was determined that the T Party element of congress are dead beats and did not wish to pay the country's debt for the loans made to the country. Plain and simple.
Actually our debt to GDP ratio is similar to Japan's when S&P downgraded them from AAA to AA+ back in 2000.
S&P downgraded us because we have no plan in place to improve this. If anything, our current course is for a higher debt to GDP ratio. They feel that we need to make more cuts AND raise taxes.
If the country's credit rating was downgraded because we spent more money than we took in, the the credit rating would have been downgraded almost within the first year of the Bush 43 Presidency.
The T Party probably will not be satisfied until we have the credit rating of a third world company and the infrastructure as well. The brainwashed idiots will not be completed until a majority of the country are relegated to the trailer parks where most of their ignorant constituency live who are too dumb to know a better way. We need to get to the polls and vote as we have never voted before to get rid of their ignorant un American @sses ASAP.
Was it Japan's TEA party that caused it's rating to be dropped back in 2000 or was it their debt to GDP ratio that was similar to ours now?
Or was Japan's downgrade all Bush's fault too? LOL
Nothing I can say that will change your mind? How about what S&P said?
"S&P said 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." It also blamed the weakened "effectiveness, stability, and predictability" of U.S. policy making and political institutions at a time when challenges are mounting." http://online.wsj.com/article...
(Why are you libs SO adamant about what you heard on TV and so petulant about looking things up for themselves?)
If you try reading something other than material with a conservatively slanted and biased points of view, you might come to the same conclusion as all other sane people.
(Why are Conservatives so adamant about not accepting responsibility for their own disastrous actions and why do they try to pawn off some right wing conservative rag as a source for proof of fact?)
The FACT is that the US is spending much more than it takes in. Plain and simple, that is not good. On top of that the Dems increased discretionary spending by 28%!
Bush grew the fed in his 8 years and then Obama then outdid him in 2. You think that has anything to do with it?
How about the fact that we have no plan to EVER stop increasing the debt?
If it was you or me our credit rating would be in the dumpster.
BTW: The Wall Street Journal is far from being a "right wing conservative rag". Unlike the New York Times they have no history of deception, plagiarism, hypocrisy or publishing fiction as fact.
That is my opinion and there is no amount of conservative right wing lies, propaganda, and BS that will change it. I am not seeking Tea Party votes nor am I stupid enough to be a Tea Party member, nor have I been brainwashed by right wing rhetoric, therefore I am free to speak the truth as I see it.
Keep drinkin' that kool-aid bud!
one more year of this and trouble is only just across the street.
You are aware that discretionary spending under Obama rose by 28%, right?
Plenty of blame to go around.
While Bush certainly had a hand in it, he was also responsible for warning congress 17 times about Fannie & Freddie. All 17 times he was rebuked by people like Frank, Waters and Davis. If you recall, they were cooking their books and their buying toxic mortgages led to the bursting of the housing bubble which led to the recession we're in.
Not the best time for Obama & co to increase discretionary spending by a whopping 28%.
The debt ceiling was raised seven times for Bush while he was turning a surplus into a deficit. Now, the Tea Party chose to hold the debt ceiling hostage by making unreasonab­le demands and pushing us to the edge of default. You need to take a more realistic look at who is really responsibl­e for this humiliatio­n and the damage to the credibilit­y of the U.S..”
Your saying that Obama and the Democrats rapid and enormous increases in spending of money we don't have and need to borrow are irrelevant?
Why are you ignoring the Fannie & Freddie mess which led to the recession in the first place?
Getting us deeper into debt and faster than ever before in history is not the way to correct a debt problem.
Big goverment......well if you have ever driven or flown accross this country then you know this is a big dam country. Don't forget it was Bush who doubled the size of the goverment employees.
Now sit down and read this.........http://www.netro...
This might help you see clearer.
2. You're link didn't post
Myopia (Greek: μυωπία, muōpia, "nearsightedness" (Am. Eng.), "shortsightedness" (Brit. Eng.))[1] is a refractive defect of the eye in which collimated light produces image focus in front of the retina when accommodation is relaxed. In simpler terms, myopia is a condition of the eye where the light that comes in does not directly focus on the retina which is in the back of the eye. Because of this, the image that one sees is out of focus when looking at a distant object but comes into focus when looking at a close object.
Twenty five years of working underground will mess your eyes up. Yes I am currently seeing an eye doctor.
Care to see the CSPAN video? No obscure website. Just CSPAN.