We've known of the smaller credit rating agencies' forecasts, and now it looks as though the dominos are beginning to topple with the larger ones. In a statement released Friday evening, after the markets closed of course, Standard & Poor's issued the first DOWNGRADE in the rating agency's history.
CBS reports:
The credit rating agency says that it is cutting the country's top AAA rating by one notch to AA-plus. The credit agency said late Friday that it is making the move because the deficit reduction plan passed by Congress on Tuesday did not go far enough to stabilize the country's debt situation and that the policymaking is not stable or effective as needed to address the current economic challenge.
In explaining its decision, S&P said in a statement that "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."
It added: "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."
Now what was that again that Timmy 'Tax Cheat' Geithner assured us of back in April...oh yeah...
As one would imagine, Hot Air is covering the downgrade news like a hawk! And Eric Erickson at RedState makes the point that while the Left will rush to blame the GOP for the S&P downgrade, it would be wise to recall that ONLY the tea party had a $4 trillion plan, with bipartisan agreement in the House to boot, and that was Cut, Cap & Balance!
You know, when a credit rating agency tells Washington '$4T in cuts would be a 'good start' towards avoiding a downgrade', then the powers that be make a deal to only cut half of that (if you're willing to believe those cuts are even 'real'), there's really no reason to expected anything other than a downgrade! Thanks Barry, thanks Timmy, thanks Dems, thanks for nothing...and we won't forget Reid, McConnell and Boehner's compromise in this either. Piss poor leadership will guide a country to its own demise every time...and no amount of rhetorical finesse can soften the blow. This is President Barack Hussein Obama's economy now!
