The United States' credit rating was cut for the first time when Standard and Poor's lowered it from triple-A to AA+, citing the country's looming deficit burden and weak policy-making process.
Standard and Poor's on Friday revised the nation's rating downwards to a AA+ with a negative outlook, despite a push back from the White House, which said the rating agency's analysis of the US economy was deeply flawed.
It was the first time the US was downgraded since it first received a triple-A rating from Moody's in 1917; it has held the S&P rating since 1941.
Moody's and a third ratings agency, Fitch, say they continue to study the deficit plan to see if the US merits being kept in their ranks of triple-A countries.
The blow came after the White House, Democratic and Republican legislators agreed during the week to a deal to raise the nation's debt ceiling after months of wrangling that sent jitters rippling through the global economy still trying to recover from the 2008 recession.
A debt downgrade will be a symbolic embarrassment for President Barack Obama, his administration and the Americans, and could raise the cost of US government borrowing.
Since the dollar and US Treasury bonds are so central to world trade and finance, a downgrade theoretically could rock the global economy, which is already being battered by the eurozone crisis.
But some analysts have questioned whether a ratings cut would impact demand for US debt, have dismissed the raters as having low credibility, and questioned whether the markets would take much notice.
Ratings agencies Moody's and Fitch both reaffirmed their triple-A rating of US debt shortly after Obama signed a bill raising the debt ceiling on Tuesday.
The downgrade technically signalled that it is more likely than before that the United States could renege on its debts.
Read more: http://www.smh.com.au/business/us-has-i ... z1UD2LuhJb
AA+
AA+
“If you trust in yourself, and believe in your dreams, and follow your star. . . you'll still get beaten by people who spent their time working hard and learning things and weren't so lazy.”
Re: AA+
Well played, you vassals of purblind corporate malfeasance masquerading as American elected officials, you.
Hitman for the Riboflavin Tong
Re: AA+
The US "must do better" in tackling its pressing economic challenges, the White House says, after a deal on debt was signed into law last week.
Spokesman Jay Carney said the talks on raising the US debt ceiling in order to avoid a default had taken too long and been too divisive.
The statement comes a day after rating agency Standard & Poor's downgraded the US's top-notch AAA rating to AA+.
The US uncertainty led to a week of turmoil on the world financial markets.
There were fears that the US could be heading for a double-dip recession and that the sovereign debt crisis in the eurozone could spread to Italy and Spain.
The compromise US debt deal, which was passed in the Senate on Tuesday, raises the debt limit by up to $2.4tn (£1.5tn) from $14.3tn, and makes savings of at least $2.1tn in 10 years.
Mr Carney said the deal had been "an important step in the right direction", but added that "the path to getting there took too long and was at times too divisive".
bbc report
“If you trust in yourself, and believe in your dreams, and follow your star. . . you'll still get beaten by people who spent their time working hard and learning things and weren't so lazy.”
Re: AA+
Sometimes it takes more than fiscal bad policy to have your country's credit rating reevaluated.
How well I remember my former Prime Minister and pinup boy having a radio conversation with shock jock John Laws about our financial solidarity here.
What was the term he used to describe Australia? That's right! Banana Republic.
What was the effect of those two little words?
That's right, new credit rating from AAA to AA.
Bugger.
How well I remember my former Prime Minister and pinup boy having a radio conversation with shock jock John Laws about our financial solidarity here.
What was the term he used to describe Australia? That's right! Banana Republic.
What was the effect of those two little words?
That's right, new credit rating from AAA to AA.
Bugger.
MOODY'S obviously didn't plan it, but it downgraded Australia's big four banks almost 25 years to the day after Paul Keating told John Laws that Australia was living beyond its means, and in danger of becoming a banana republic.
Keating's comment in mid-May 1986 tipped the dollar into a slide that carried it from above US74¢ to just under US60¢ in three months, and tipped the nation into a period of introspection and economic reform.
Bah!
Re: AA+
Mind you, though it caused a LOT of heartache down under, it made us resilient in this latest financial crisis as we had already done the hard work on bolstering and strengthening a couple of decades before the rest of you.
God Bless Paully. He wasn't a man, but a political genius!
His slippers can appear under my bed at anytime .... though preferably when Gob is elsewhere.
God Bless Paully. He wasn't a man, but a political genius!
His slippers can appear under my bed at anytime .... though preferably when Gob is elsewhere.
Bah!
Re: AA+
The Hen wrote:Of course the years HAVE aged him.
Keating and Kezza last year.
Eventually it catches up with all of us. We try to run, we can live in denial but in the end it gets you all. Except for me I am middle aged; I an gong to live to be over a hundred years.
I expected to be placed in an air force combat position such as security police, forward air control, pararescue or E.O.D. I would have liked dog handler. I had heard about the dog Nemo and was highly impressed. “SFB” is sad I didn’t end up in E.O.D.
Re: AA+
For the people, countries and agencies who seek to protect their wealth by investing in low-risk bonds, where are they going to go? That is the question.
Russia? Riiiiiiight.
The funniest thing about the whole fiasco is the after-reaction of liberals like the Rubato person. Out of one side of their mouth they complain that the "stimulus" was too timid - that the Dems didn't waste enough money on it, and out of the other side of their mouth they blame the deficits on the previous administration.
The audacity and stupidity of these complaints is mind-boggling.
Russia? Riiiiiiight.
The funniest thing about the whole fiasco is the after-reaction of liberals like the Rubato person. Out of one side of their mouth they complain that the "stimulus" was too timid - that the Dems didn't waste enough money on it, and out of the other side of their mouth they blame the deficits on the previous administration.
The audacity and stupidity of these complaints is mind-boggling.
Re: AA+
Actually, what's mind-boggling is the near-Olympian ability of some self-styled 'conservatives' to indulge themselves in fatuously revisionist statements, specifically as they pertain to the above-mentioned 'previous administration's' publicly acknowledged capacity for looting the exchequer on behalf of their cronies whilst running 2 foreign land wars on the national credit card using careless deceptions and bellicose logical fallacies.dgs49 wrote:Out of one side of their mouth they complain that the "stimulus" was too timid - that the Dems didn't waste enough money on it, and out of the other side of their mouth they blame the deficits on the previous administration.
The audacity and stupidity of these complaints is mind-boggling.
Do such people lack the basic cognitive abilities usually associated with lower vertebrates, or do they think that no-one is paying attention to their lazy mendacity?
An inquiry to ponder.
Hitman for the Riboflavin Tong
Re: AA+
dgs49 wrote:"...
The funniest thing about the whole fiasco is the after-reaction of liberals like the Rubato person. Out of one side of their mouth they complain that the "stimulus" was too timid - that the Dems didn't waste enough money on it, and out of the other side of their mouth they blame the deficits on the previous administration.
The audacity and stupidity of these complaints is mind-boggling.
Saving water is a good thing and wasting it is a bad thing. But turning off the faucet when your house is on fire is stupid (republicans refusal to continue the stimulus in the worst economic disaster in 80 years, which they created) and opening the faucets and letting it run down the drain when your yard is already watered is stupid (Bush throwing away $600/ billion per year on tax cuts for the rich and consumptive spending increases).
But you are too stupid ever to understand this.
yrs,
rubato
Re: AA+
"If it generates economic growth, and therefore increased tax revenues, then it can."
We agree on something.
However, if government spending does not stimulate economic growth, nor lead to increase tax revenues, then borrowing and spending ON TOP of what must already be borrowed and spent merely to keep our government operating, seems rather foolish, eh what?
And with a couple trillion dollars already spent on "stimulus" and no tangible results realized, the evidence seems fairly compelling that even more borrowing and spending is good money after bad.
So far, it appears that the chief beneficiaries of Obama-gesse are government employees and members of favored unions - neither of which holds much public sympathy. And the remaining 80+% of us are stuck with paying the bills.
I'm reminded of the 1980 Presidential Campaign, when Mr. Gore's main sound bite was that he was going to save us from GWB's (non-existent) "risky schemes" to privatize social security. By comparison to that Risky Scheme," Barry's "risky scheme" to spend us into prosperity seems a lot like Russian Roulette with only one empty cylinder. It might work, but I wouldn't bet my financial future on it.
We agree on something.
However, if government spending does not stimulate economic growth, nor lead to increase tax revenues, then borrowing and spending ON TOP of what must already be borrowed and spent merely to keep our government operating, seems rather foolish, eh what?
And with a couple trillion dollars already spent on "stimulus" and no tangible results realized, the evidence seems fairly compelling that even more borrowing and spending is good money after bad.
So far, it appears that the chief beneficiaries of Obama-gesse are government employees and members of favored unions - neither of which holds much public sympathy. And the remaining 80+% of us are stuck with paying the bills.
I'm reminded of the 1980 Presidential Campaign, when Mr. Gore's main sound bite was that he was going to save us from GWB's (non-existent) "risky schemes" to privatize social security. By comparison to that Risky Scheme," Barry's "risky scheme" to spend us into prosperity seems a lot like Russian Roulette with only one empty cylinder. It might work, but I wouldn't bet my financial future on it.
Re: AA+
Government does not produce anything. Before they can spend money, they must either print it, borrow it, or take it out of the private economy. Unless it's a bureaucrat type job (parasitic), what you are calling a stimulous job like building a road or bridge, it's only temporary.
I don't give a damn for a man that can only spell a word one way. Mark Twain
Re: AA+
The same could have been said of the Bush tax cuts, eh what?dgs49 wrote:However, if government spending does not stimulate economic growth, nor lead to increase tax revenues, then borrowing and spending ON TOP of what must already be borrowed and spent merely to keep our government operating, seems rather foolish, eh what?
Good to see you consider a job in the military to be parasitic, just because it's more than temporary.liberty1 wrote:Unless it's a bureaucrat type job (parasitic), what you are calling a stimulous job like building a road or bridge, it's only temporary.
If the government spends money on salaries, that money goes right into the economy. If the government spends money purchasing equipment or paying its heating bills, that money goes into the economy. The bakery that sells a loaf of bread, the Best Buy that sells a computer, the oil company that sells its heating oil doesn't care whether the person buying their stuff works in government, or works for a company that got a government contract, or works for an interest that is completely private, they still sold a loaf of bread, a computer, and a tank of heating oil.
