S&P Goes Negative On US

Things don’t look good if we don’t at least get a coherent plan together to solve America’s fiscal crisis:

Standard & Poor’s on Monday downgraded the outlook for the United States to negative, saying it believes there’s a risk U.S. policymakers may not reach agreement on how to address the country’s long-term fiscal pressures.

“Because the U.S. has, relative to its ‘AAA’ peers, what we consider to be very large budget deficits and rising government indebtedness and the path to addressing these is not clear to us, we have revised our outlook on the long-term rating to negative from stable,” the agency said in a statement.

In an interview with CNBC, David Beers, S&P’s global head of sovereign ratings, said the agency has been “struck increasingly by the difference in how other governments are dealing with fiscal consolidation.”

“The U.S. to us looks to be an increasing outlier in that context,” Beers added.

Bond ratings matter because the lower the rating, the higher the interest that bond purchasers will demand before laying out their money. Since bonds are one of the principal means for the US government to finance its debt, a lower bond rating means it will be more expensive to service the debt in the future, which will then make the financial crisis that much worse.

It’s kinda like credit card companies raising the interest rates on people whose credit ratings drop because of too much debt… it becomes progressively more expensive to cover the existing debt, which leads to more debt… without a realistic plan, it quickly becomes a death spiral.

Of course, we have such a plan, and it just passed the House, but the lefties are demagoging it.

One might almost think they wanted the nation to fall into a death spiral.

Oh, wait…


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About Conservative Wanderer

Conservative Wanderer is currently Editor-in-Chief of That's Freedom You Hear! That means anything that goes wrong can be blamed on him. Previously he was a contributor to the PJ Tatler.

One response to “S&P Goes Negative On US”

  1. 49erDweet says :

    What took S&P so long?

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