Standard & Poor’s downgraded the US outlook to negative.
Ratings firm Standard & Poor’s cut its outlook on U.S. government debt to “negative” from “stable” for the first time in history, citing ongoing concerns over the long-term fiscal health of the country.
S&P analysts hosted a call explaining their decision to keep the U.S. at a AAA rating, but move the outlook to “negative.” MarketBeat live-blogged the call. Here is the recap.
S&P is unsure that the “gulf of differences” between Republicans and Democrats over how to reduce the country’s fiscal deficit can be overcome to provide meaningful long-term change, said David Beers, S&P’s global head of sovereign debt ratings. S&P did affirm the country’s top-notch triple-A rating.
“The underlying trajectory of the debt burden is still rising,” he said. Other triple-A-rated countries that have faced similar problems, such as the U.K., have implemented new measures to handle debt problems, leaving the U.S. behind in the fight against rising debt, he said.
The ratings company believes the chances that the U.S.’s credit rating will be lowered within two years are around one-in-three.
I better not hear ANYONE use the word “unexpected” about this.
If anything, I’m surprised it’s taken this long to do it.
It’s pretty clear that the political class lacks the will to do anything to get our finances in order. At this point there is no way this can end in any way other than badly. The question now is how bad, 30’s depression bad or Kevin Baker’s colander and banana hammock predictions?
Let’s hope it’s not the latter. I don’t want to see you or Kevin Bacon in a banana hammock. Eek!
Actually, it’s kind of refreshing to hear from the Grown Ups regarding the U.S. Debt, rather than that pack of Squabbling Brats stuck inside the Capital Beltway Play Pen. Thanks, S+P!
I’m going for the 30’s Depression Bad, with some Civil Disturbance on the side. I can use my Weimar Republic Deutchmarks then, ’cause they’ll probably be worth more than the Dollar.
Since I met you a couple Boomershoots ago I’ve known you resembled a certain favorite film star, just couldn’t place who it was. Having just watched Enter the Dragon tonight I realized that it’s John Saxon. Time for you to saddle up and save the day, I suppose!
Arizona Republic headline, front page at the top: U.S. Stunned by Wall St. Alert on Debt
I guess that qualifies as “unexpected.”
Sigh.
It’s unexpected that the US still has a AAA rating. I’m wondering where S&P expects the Treasury to pull its revenue to honor debts. Are they selling of the Navy? Is Obama making pocket fusion reactors using volunteer labor in the White House basement? Are they going to off everyone collecting entitlements?
I’m thinking that none of the above are on the table. In fact, it’s probably more along the lines of a junket in Hawaii where a bunch of suits waved their arms in the air and yelled, “Yaaay!” to an animated movie of pop-tart cat.