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Standard & Poors Drops US Credit Rating

The credit rating of the United States of America has been reduced from AAA to AA+ by the Standard & Poors rating agency.

In an historic development the willingness of the United States government to fulfill financial obligations has been called into question by a major ratings agency due to “political risks” and a “rising debt burden.”

“The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed,” said the S&P in a statement. “The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year’s wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options.”

A lower credit rating could impact mortgage loans, auto financing, and the cost and ability of the federal government to borrow money.

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