Administration Expecting S&P Downgrade (UPDATED and BUMPED: Downgrade Happened)


Well, it does kinda follow from their policies that they’d be expecting this:

A government official tells ABC News that the federal government is expecting and preparing for bond rating agency Standard & Poor’s to downgrade the rating of US debt from its current AAA value.

Official reasons given, he official says, will be the political confusion surrounding the process of raising the debt ceiling, and lack of confidence that the political system will be able to agree to more deficit reduction. A source says Republicans saying that they refuse to accept any tax increases as part of a larger deal will be part of the reason cited.

Well, of course they’re going to try to blame the Republicans, but honestly, I don’t think it’ll fly. However, even if they privately expect it, they can’t very well go out and say “our policies caused this,” so they gotta do something.

Update:

Well, it happened, and a good deal quicker than I expected.

(Reuters) – The United States lost its top-notch AAA credit rating from Standard & Poor’s on Friday in an unprecedented reversal of fortune for the world’s largest economy.

S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about the government’s budget deficits and rising debt burden. The move is likely to raise borrowing costs eventually for the American government, companies and consumers.

“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,” S&P said in a statement.

The full S&P statement can be found here.

And, let’s not remember Mr. Geithner telling everyone back in April that there was “no risk” of an S&P downgrade.

The GOP campaign ads almost write themselves, don’t they?

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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.
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