S & P Downgrades U.S. Credit Rating from AAA to AA+
As John already posted in the breaking news story, S&P has went ahead and downgraded the United States credit rating from AAA to AA+. Rachel talked to Rep. Barney Frank who is the former Chair of the House Financial Services Committee and the Washington Post's Ezra Klein about tonight's news, but first she went through some of the details that went on this evening.
Rachel Maddow read some of this part of S&P's decision to go ahead with the downgrade:
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."
Barney Frank blasted Standard & Poor's for their poor record during the meltdown of the financial service industries and felt that they were trying to over compensate now for past mistakes. He also criticized them for being too lienent with their ratings on private enteprise, while being too harsh with their ratings of government from the federal level right on down to the states and local governments.
When asked if the recent debacle by our politicians in Washington over raising the debt ceiling was responsible for this happening, Frank pushed back and said if anything, this proved that ultimately the full faith and credit of the United States was not something that could be allowed to be defaulted on.
Ezra Klein wasn't quite as charitable about Congressman Frank's assessment on whether our politicians were at all responsible for this happening and here's more from his column from just before this decision was made -- Five thoughts on the potential S&P downgrade:
Tyler Cowen has six useful thoughts here. I’d add a few more:
1) S&P is downgrading their estimation of our political system, not our actual ability to pay our debts. Indeed, the past 36 hours offered a stunning demonstration of the market’s faith in our ability to pay our debts. The panic sent investors rushing to buy Treasuries, sending yields on 10-year Treasuries to 2.4 percent -- that’s almost nothing -- and demonstrating that American debt is still considered the safest bet in the world. That vote of confidence under real world conditions is far more important than anything S&P says.
2) Of course S&P is downgrading our political system. Did you see the nonsense we pulled over the past few months? The Republican Party took the country to the brink of default, and for what? A smaller and less certain deficit-reduction deal than they could have gotten if they had been willing to compromise with the Democrats. And then Senate Minority Leader Mitch McConnell said these default-driven deals would be the norm around Washington from now on. Why shouldn’t S&P downgrade our debt? Read on...
Way to fuck things up Republicans and find another way to increase spending since higher interest rates means more money we have to pay on our national debt interest. Leave it to Republicans to find new ways to increase spending without actually producing anything.
They really are a menace to society. I hope people are going to wake up to this fact, and render republicans extinct.
"Government by organized money is just as dangerous as Government by organized mob"
-= Franklin Delano Roosevelt =-
The enemy within ." I hope people are going to wake up to this fact, and render republicans extinct." , amen to that Ape man .
Insanity , it is what it is , there is no understanding it .
That's their agenda , bankrupt this country , make Obama fail , make this country fail and then take it over , their own creation according to their warped and disastrous ideology . Traitors , saboteurs , evil .
Insanity , it is what it is , there is no understanding it .
Is this the same S & P that rated sub-prime mortgage loans as AAA that helped to lead to the implosion of the global economy?
why yes, i do believe you are correct
Between the S&P and the Federal Reserve, what is there for government to do? Maybe government should shut down the Federal Reserve and ignore the S&P for the good of the world.
"Government by organized money is just as dangerous as Government by organized mob"
-= Franklin Delano Roosevelt =-
It sounds like an attack on the United States to me. Proper response is invasion, pacification of the indigenous people in the enemy territory, a shock-and-awe attack on middle management, and permanent enhanced interrogation for the command level.
No need for trials.
We have these weapons, do we not? We have these tactics and use them, do we not? Why the fuck are we waiting? Think of the profits and the glory!
Bravo!
Which basically means the US has been receiving a bloated rating for many years as it's not much better than toxic assets as its trade deficit widens, dollar slips, debt rises in leaps and bounds under Republican presidents, and citizen savings becomes negative.
You are as naive as a newborn if you think this whole monetary fiasco was not planned by the American politicians on both sides of the aisle and their puppet masters.
It was Kermit. The green one.
Pretty obvious when you get right down to it but I've not wanted to admit it . Have wasted a lot of time and energy making an ass out of myself , time after time getting totally bent out of shape , hoping for the ( all but ) non existent good guys to rise up , defeat the bad guys and stop them , wondering why they don't fight , pissed off because they cave over and over again . Am trying to ride a dead horse , I think we all are .
Insanity , it is what it is , there is no understanding it .
I'd like to personally thank the twit who is my congressman, Todd Akin, and the other 60+ Tea Party assholes who played this drama for all it was worth. Sure, you'll probably now succeed in taking down Obama and the Democrats, which was your purpose. At what price, though? I am sorry that I called you assholes. You would really need to step up your game move up to asshole status.
Thinking of all the retired people with money in "safely" in bonds, who will have a rougher retirement. Now don't forget, you want to totally screw them over by fouling up Social Security and Medicare, too. In the meantime they can't even help their out of work kids and grandkids.
Thinking of all the unemployed that you let down, all the union folks you are seeking to screw over, all the programs you've cut, all the lies you've told. Do me a favor, though. Never, ever, ever call yourselves "patriot", "proud American", all your other b.s. sobriquets. You are traitors to this country. And it's too bad that you won't be tried and punished as traitors have been in the past.
I don't know what we are but it's not number one anymore. The plus side is the thugs will have to tone it down, and dismantle that empire we can not afford anymore.
Is it the 21st century yet?
That is an understatement , thanks to the necon Reich wing who took over the Republican party , what was the richest , most powerful , most loved and respected country in the world is now the most heavily indebted nation that has ever been and our reputation is completely destroyed , not only have we become an embarrassment , we've become a disgrace , hated , trouble for the entire world . Putin said recently that the United States has become a pariah , it's true .Where is this country going to end up ? When and where does this end ?
Insanity , it is what it is , there is no understanding it .
be advising S&P that the FBI have several very open ended warrants and will be knocking on some doors and feeling some collars very soon, unless the rating goes back up.
Extortion! A game for the whole family!
"Civilized men are more discourteous than savages because they know they can be impolite without having their skulls split, as a general thing." -- Robert E. Howard
And let no one say the United States is too moral for that.
Take an American 100 dollar bill and go anywhere in the world and guaranteed you will be able to buy something most likely a lot of things. Take the equivalent of any other denomination and go to any place in the USA or Canada for that matter and guess what, you will not be able to spend it. Truth be told, debt is currency in this world, if S&P doesn't think the USA is the most credit worthy country on the planet, well, its time to short S&P stock in a big way.
... and in some places in the world will they tell you, politely, to take your $100 to a place where they can exchange it for the local currency before purchasing anything from them since they had other things more important to attend that day than figuring out what the exact exchange rate for the dollar was.
At some point, some Americans are gonna have to start contemplate the remote possibility that they are not the center of the world.
CTHULHU 2012 "Why vote for a lesser evil?"
My experience as well. 20 years ago not so much, but now if you flash your US cash in Brasil they'll send you to an exchange where you can get Reals for it. 20 years ago they would gladly take the hundred ( they'd be excited in fact) but that was 20 years ago. A country with no foreign fossil fuel dependence sitting on a rain-forest full of petroleum, who also happen to have an extremely lucrative ethanol business and very little job outsourcing, just doesn't give a crap about the Franklin.
When you take a group of people who can't figure out a simple thing like birth certificates, and who believe that the earth is 6000 years old ... and you put them in charge of the worlds largest economy.
WIN!!!
can't you just see their furrowed brows....but, but, but hims a moslin an a sochalits.
You meant to say "creationists" , or "Bibleholics", right?
Ed-words
when no talent wind bags can disrupt the commerce and financial security of an entire nation. How did the Tea Party ever accumulate this level of power? Where is the leadership of this country that needs to tell these assholes to shut up and go lay down by their bowls? This is friggin' unbelievable....And as for S&P... what can we the people do to see these clowns shut down forever? I for one would be happy to never hear about them ever again.
Every man must decide whether he will walk in the light of creative altruism or in the darkness of destructive selfishness.
Martin Luther King, Jr.
I could swear there's an old SNL commercial for "AAAAA, the automobile club run by alcoholics", but a Google search comes up blank. :(
"Parachutes are allowed in checked or carry-on baggage, but may not be worn in flight."
---Southwest Airlines
The end is nigh. Head for the hills.
far left loon >.<
Iron Maiden
"Parachutes are allowed in checked or carry-on baggage, but may not be worn in flight."
---Southwest Airlines
to scan all the Teabagger rallies and "town hall meetings" for the older folks who supported such policies and completely cut off their SSI and Medicare? I think these people need to starve and suffer before the rest of us; elections have consequences.
"Parachutes are allowed in checked or carry-on baggage, but may not be worn in flight."
---Southwest Airlines
I'm not sure I trust anyone who suggests that I read McArdel and the Third way for economic information.
Really?
It makes it a chore to read all the way through an article when the first sentence sounds like it was written by someone who failed grade 5.
It's,'S&P has gone ahead', or 'S&P went ahead'.
For those who care - 'Gone' is the past participle. 'Went' is the simple past. The 'have/had' verb constructions (perfect tenses) take the past participle.
Sorry - just working on my first cup of coffee this morning … I'll be more easy-going after a bit.
cutting our education, thats what things like dangling participles and closing prepositions are a result of.
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;)
Of course S&P downgraded US credit. Could anyone be surprised? S&P was one of the rating agencies that facilitated the housing bubble by chronically lying about credit-worthiness. And of course S&P and most of the fat-cat money guys want Obama to fail. No doubt Obama will get blamed for this phony-baloney downgrade although House Repugs brought it about by playing chicken right up to the last minute.
So... they say this will result in higher interest rates. Yeah, I'm sure it'll be used to ratchet up interest on consumer loans and mortgages. Any bets on whether the almost non-existent interest banks pay on CDs and savings accounts will remain next to nothing?
Let's see. S&P flubbed the math, and have had to admit it ... but hold on their rating. That means the downgrade is 100% because of the intransigence of the Republican party and it's hostage taking economic terrorism.
I agree with you the S&P has no credibility at all. But that still doesn't mean they don't have a point here. The most important thing in their report, which only Ezra Klein seems to have noticed, is this was primarily done because of the failure of our political system to deal with the big issues facing this nation. This downgrade is as much Obama's fault as it was the GOP. If this president would've come out early on and challenged the GOP by saying I want a clean debt ceiling bill, and I will veto anything else, he could've prevented the last few months of silliness. But because this president constantly falls for these GOP traps, he helped to usher in this downgrade.
What the S&P basically said was the US doesn't have strong leadership from all sectors, therefore, they don't believe we can get our fiscal house in order. THEY'RE RIGHT! But this doesn't mean the Tea Party is the only party responsible. The Democrats have failed to anticipate and understand the machinations of the right, and now the nation is paying the price. When Democrats return to the Democrats of old, and actually step into the ring and join the fight, instead of running and hiding in a corner as they get punched, then maybe we'll begin to move this nation in a different direction and repair the damage wrought on us by 30 years of Reaganist free-market, supply side economics.
Anyone who believes that Standard and Poors should determine the credit worthiness of the United States is a damnable and sniveling fool. Alexander Hamilton provided the tonic for removing this sovereign Republic from the grasp of a financial oligarchy based in the City of London. His named antagonist in his reports to Congress was none other than Adam Smith. Smith's doctrine that wealth was merely the product of buying and selling to get money, and that mankind must only be concerned with the principle of pleasure and pain and not the consequences of our actions upon the future of humanity is the epitome of a slave's (or rather a subject's) mentality. For the most part, both sides of the aisle accept (and that unthinkingly and blindly) these tenets of Adam Smith's wretched ideology. The idea that the moneyed interests rule is their unshakable conviction. This is why they cower at the likes of S&P.
The simple fact is that everything decent our nation has accomplished has been based upon the exact opposite principle. We have led the world because we have had a vision that our nation has a mission to uplift mankind and that the purpose of government is precisely to provide for the general welfare of future generations yet unborn. It is well past high time we throw off the shackles of the craven belief that "money rules the world." What is required is that our citizens exhibit a backbone again and impose a swift end to the control of these financiers by re-enacting FDR's Glass-Steagall. Call or write your Congressman now to support Marcy Kaptur's Glass Steagall Bill H.R.1489 and Maurice Hinchey's Glass-Steagall bill H.R.2451
And I count on that.
Jeanne
What we're witnessing is the global meltdown of capitalism, and a policital and media structure willfully and desperately trying to deny what's going on. Notice the only places on the planet not falling apart are the Scandanavian nations, who protected their citizens and nations against the ravages of the so-called free market; Latin American nations who threw out all the American stooges and began to reform their systems to protect their citizens and nations from the ravages of capitalism (Brazil has the world's fastest growing GDP); and China, a Communist dictatorship who has taken advantage of the greed of American corporations to supply employment to their citizens, albeit at low wages, and is holding to its wealth, while bringing in more from greedy Westerners.
Obama, The GOP, and The Democrats have no answers because they refuse to acknowledge what the problem is. They refuse to accept that their religion of free market capitalism is in total free-fall, and no matter how much austerity they impose on their citizens, this system is failing. Imposing austerity, as has been proven in Greece and London, only makes the situation much worse, as people have less resources available to support an economy, yet our politicians, seeing what's happening in Europe, follow the same deestructive prescription for recovery.
Those of us not caught up in the mania of free markets and supply side economics understand what needs to be done. We need to return to the policies of FDR and save capitalism from itself, yet again. This won't happen because unlike FDR's time, the Democratic party is as compromised by big money as the GOP. Money has corrupted our political system, and yet media figures sit on tv and ask the question of what's wrong with our political system. They then point to the tea party, knowing full well, the same people who fund our normal politics also funded and helped elect the tea party lunatics. The media and GOP promoted the tea party as people who were fed up with government overspending and wanted some fiscal responsibility. What they failed to recognize was this group of no-nothings understood nothing about governance or economics. So, when they held the country hostage to force 100's of billions in spending cuts, while simultaneously refusing to raise revenues, these political neophytes have doomed this nation.
The GOP, having laid down with these dogs and gotten fleas and now rabies, are now blaming Mr. Obama and the Democrats. I blame the president and Democrats for different reasons, because this president, his team, and the Democrats have failed to recognize the severe danger posed by this rabid GOP. They still treat these people as honorable people who really want to do what's right for America, but have different ways of getting it done. Is there any doubt now who the GOP truly is. Look at what they've done to this nation, driven it to the first downgrade in America's history. All this being done with the cowardice and acquiescence of the President and Democratic party.
Here's the big question now, will this president stop with this narcisstic notion of his that he can bring this nation together under his leadership to do "big things", or will he finally realize the reality of his foes. They don't care how many people suffer in this nation, as long as their rich friends don't have to pay any more taxes and get to continue to unfettered rape this nation of its resources. In other words, will Democrats return to being Democrats, or will they continue selling their ass to the highest bidders and agreeing with the GOP on the continued destruction of America.
I said when Obama got elected I didn't expect much from him as far as moving the country in another direction. I said the most we could expect from him was to put the brakes on the bus to keep it from going over the cliff, and sadly, to my despair, that's all we've gotten. He brags about the mediocre changes he's made as if they were the most significant reforms in this nation's history. He brags about stopping the bus from going over the cliff, never acknowledging the fact the bus is still hanging over edge ready to be pushed to its doom. He's failed to pull the bus away from the edge of the cliff and placed it on a different path to prosperity. No, this president has done about as much as I thought he would. And that's bad for America. We need a president who recognizes the failure of the current system and is at least willing to make the argument for a system built on democracy, not oligarchy. Sadly, Mr. Obama is not that person!
It's the fixed markets we have seen melting down. You don't have a free market any longer when the FED holds interest rates at 1/4 of a percent for 3 years running. This should have happened sooner and actually we should be at BB+ with the amount of debt we have.
We'll it's another round of vindication for me, I've been telling people here for years this moment was coming and impugned at every turn for it. I wonder if I'll get any apologies now, I'm not holding my breath.
Goodnight, Frau Blücher
Me too Vegas. Saw this coming a long time ago. America can only pull so many rabbits out of the hat for so long. Easy credit rabbit, low taxes rabbit, offshore manufacturing rabbit.
Well, we have no more rabbits.
I don't believe in God. Teach a man to be a good citizen and you have solved the problem of life.
-Andrew Carnegie
The fundamental message from S&P is that Congress is out of balance -- too much yin, not enough yang.
You cannot proclaim that you want to significantly reduce the national debt solely through budget cuts and refuse to recognize that revenue increases via taxation (whether it be eliminating corporate tax breaks or allowing the Bush era "temporary" reductions to expire) is also an essential component to the overall solution.
And if you are concerned about high unemployment, then you cannot do everything in your power to induce layoffs of public employees, and then point at the resulting increase in unemployed Americans and insist that the opposition bears sole responsibility for the outcome.
The S&P is basically funded by the big banks who are now going to make a bunch more of the same bonds that they were going to buy anyway. I really smells of the continuing corporate take over of the US government. Privatize, Privatize and do it some more until the government is run by a corporate committee and we all are f&^Ked. The lead story , about corporate slave labor in our prisons is a perfect example to the slow creep that is taking place.
Nice sound clip from a law maker directly involved in the nation's financials sector. What are you people doing to earn your pay. Trading on Wall Street with insider knowledge. while sitting by as regulations are dismantled or watered down i.e. Glass Spiegel [http://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_Act].
Don't believe S&P he says, well investors worldwide certainly do. Barney Frank and his cohorts did absolutely nothing much after the 2008. Why should people listen to these gasbags?
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