For the first time in our country’s history, our debt is rated less than risk-free. There are now 17 countries that have a BETTER credit rating than the United States of America.
United States of America Long-Term Rating Lowered To ‘AA+’ On Political Risks And Rising Debt Burden; Outlook Negative
We have lowered our long-term sovereign credit rating on the United States of America to ‘AA+’ from ‘AAA’ and affirmed the ‘A-1+’ short-term rating.
We have also removed both the short- and long-term ratings from CreditWatch negative.
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.
More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.
Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us 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 any time soon.
The outlook on the long-term rating is negative. We could lower the long-term rating to ‘AA’ within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.
Stopping just shy of calling Congress and this Administration a buch of weak-kneed, whinging babies, they state their rationale:
We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.
Are you listening Washington?!! You guys have screwed around, argued, bickered and played partisan politics while the proverbial Rome has been BURNING! You were warned by the ratings agencies and by your own constituents…..repeatedly. Yet what you came up with was nothing but a bunch of smoke and mirrors. Did you REALLY think anyone would fall for the sham that you called the ‘great compromise that would save us’?!! YOUR ‘DEAL’ CUT NOTHING FROM THE MASSIVE DEBT OVERHANG!
If you weren’t listening then Congress and Obama, listen NOW: as we stated here repeatedly YOU HAVE DONE NOTHING BUT LIE TO THE AMERICAN PEOPLE so that you could line your own pockets, increase your own power and dole out money to your preferred supporters. YOU OWN THIS. YOU have refused from the beginning to prosecute those who have committed the financial fraud that has pillaged the entire globe. Instead you took money from hardworking people and bailed out those very criminal institutions!
Then you have the audacity to state you are willing to further raise our taxes and renig on promises made to the American people you can no longer afford to keep because you spent the money on your pet pork projects and your precious ‘favored industries’. And then you LIE about cutting the spending! Do you think Americans don’t understand our entire government has become a kleptocracy?!
What happens now?
Unfortunately, we will ALL pay for YOUR refusal to make the responsible, hard choices, instead continuing to funnel money to insolvent banking institutions, the very same ones that committed massive fraud with their weapons of financial mass destruction. Time has run out now. The market will force you to do what The People could not.
Here it comes…..