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Why Standard & Poor's lowered U.S. credit rating to AA+: Read S & P report here.

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Standard & Poor's lowered the U.S. credit rating for the first time from AAA to AA+ in part because of "political risks," a warning to Congress and the White House that there was a consequence to the messy debate to raise the debt ceiling and the two-step solution that puts off deep cuts until November. Reminder S & P is one of three major credit rating agencies. Still, this historic drop is not good.


Read the S & P research report for yourself here: "America Long-Term Rating Lowered To 'AA+' On Political Risks And Rising Debt Burden; Outlook Negative."

Excerpt from S & P report:

· 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.

http://www.standardandpoors.com/servlet/BlobServer?blobheadername3=MDT-Type&blobcol=urldata&blobtable=MungoBlobs&blobheadervalue2=inline%3B+filename%3DUS_Downgraded_AA%2B.pdf&blobheadername2=Content-Disposition&blobheadervalue1=application%2Fpdf&blobkey=id&blobheadername1=content-type&blobwhere=1243942957443&blobheadervalue3=UTF-8

America Long-Term
Rating Lowered To 'AA+' On
Political Risks And Rising Debt
Burden; Outlook Negative

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Lynn Sweet

Lynn Sweet is a columnist and the Washington Bureau Chief for the Chicago Sun-Times.

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This page contains a single entry by Lynn Sweet published on August 6, 2011 7:24 AM.

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