US Credit Rating Downgraded To AA+

This country has a financial structure problem. One side doesn't want entitlement cuts and wants to raise social spending, the other doesn't want to cut defense spending or raise taxes. Our political system is straight out of The Wire.

S&P is doing this country a favor over the long run by downgrading its rating.

and each are instransigent on these absolutely incompatible goals. The only thing the compromise on is - "let's just spend more money".

Why are we in the mess that we are in then? Who votes to spend the money like water? How could we not be downgraded when we are the worst nation on the planet in terms of total debt(rank 191 out of 191 nation states). Do you really think that our credit staying AAA wasn't due to politics? This nation should have been downgraded in 2008 or even before that. Do you really think this debt ceiling being raised is going to cure our ills? WE are going to default eventually, that is inevitable. Do you want to default down $14 trillion or say $20-24 trillion? Both parties are playing politics and are more concerned about getting reelected and pushing back financial armageddon til after the elections of 2012. S&P has every right to complain about our nations dysfunctional political system, for it is the main reason we are in this mess to begin with. Both parties are just two wings of the mega party that runs things in the US. Both wings are commanded by the same NE elites that run the banks and multinational corporations. Our Supreme Court also is dysfunctional, as it is on the take, along with the members of the House and Senate. Obama's cabinet is mostly Goldman Sach's flunkies. Everyone on Capitol Hill is owned by the Wall St banks. Do ou think re electing Obama is going to make things better? Romney? It will be business as usual whoever wins in 2012, as they are owned by the same people.

Sorry, I don't buy the "it's a conspiracy" part of the rant. It's been done before and will be done again. ("it's the Northeastern elite, it's the Jews, it's the Federal Reserve, it's the oil companies, etc.).

There are real philosophical differences about balancing the rights of the group v. the rights of individuals between the parties. Unfortunately, instead of intelligent debate about how those two interests should be balanced in order to fix the economy, both sides cater to the outer edges (not necessarily fringe) of their constintuencies and end up with a "Yeah Us!" platform that, in turn, leads to the gridlock saden1 so succinctly stated earlier.

Gus, if you read my post and several others in threads elsewhere we probably agree on more than we disagree. Actually, I think that's the case more often than not around here on Warpath but that's another story.

Secondly a rating agency, such as S&P, has no business whatsoever issuing a rating on our nation's credit worthiness based on the politics of the moment. They shouldn't do it today, they shouldn't do it tomorrow, they shouldn't do it ever. Besides we're talking about S&P, the same company that just three years ago handed out AAA ratings to failed banks and mortgage lenders like they were going out of style. So I find their recent track record a little suspect at best. As far as I'm concerned this downgrade is symbolic more than anything else and the good old U.S. of A. will keep on trucking.

In terms of who's the blame? There's plenty of that to go around and without getting into which party was right or wrong, all I know is since 1962 the debt ceiling has been raised 74 times, about once every eight months. Often times with little or no fanfare. But this year, for some reason, it became the laser focus of some members of Congress to the extent it brought us to the brink of default. Just to be clear the debt ceiling has nothing to due with future spending levels. We raise the debt ceiling to cover spending appropriated in the previous Congress. In other words, many of the politicians that were calling for drastic spending cuts and austerity measures are on record voting for the very bills that they now oppose in principle. Take from that whatever you will.

This country has a financial structure problem. One side doesn't want entitlement cuts and wants to raise social spending, the other doesn't want to cut defense spending or raise taxes. Our political system is straight out of The Wire.

S&P is doing this country a favor over the long run by downgrading its rating.Agree 100%. This downgrade may be what slaps some level of economic sense into DC.

Fannie and Freddie now downgraded (I'm amazed that didn't happen a few years ago). Are individual states next?

News from The Associated Press (http://hosted.ap.org/dynamic/stories/U/US_DEBT_RATING_SP?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-08-08-10-36-17)

Fannie and Freddie now downgraded (I'm amazed that didn't happen a few years ago). Are individual states next?

News from The Associated Press (http://hosted.ap.org/dynamic/stories/U/US_DEBT_RATING_SP?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-08-08-10-36-17)

Just aske old Barney Frank.

‪Democrats were WARNED of Financial crisis and did NOTHING‬‏ - YouTube

Gus, if you read my post and several others in threads elsewhere we probably agree on more than we disagree. Actually, I think that's the case more often than not around here on Warpath but that's another story.

Secondly a rating agency, such as S&P, has no business whatsoever issuing a rating on our nation's credit worthiness based on the politics of the moment. They shouldn't do it today, they shouldn't do it tomorrow, they shouldn't do it ever. Besides we're talking about S&P, the same company that just three years ago handed out AAA ratings to failed banks and mortgage lenders like they were going out of style. So I find their recent track record a little suspect at best. As far as I'm concerned this downgrade is symbolic more than anything else and the good old U.S. of A. will keep on trucking.
In terms of who's the blame? There's plenty of that to go around and without getting into which party was right or wrong, all I know is since 1962 the debt ceiling has been raised 74 times, about once every eight months. Often times with little or no fanfare. But this year, for some reason, it became the laser focus of some members of Congress to the extent it brought us to the brink of default. Just to be clear the debt ceiling has nothing to due with future spending levels. We raise the debt ceiling to cover spending appropriated in the previous Congress. In other words, many of the politicians that were calling for drastic spending cuts and austerity measures are on record voting for the very bills that they now oppose in principle. Take from that whatever you will.

I disagree vehemently with this point. Our political arena has made it impossible for either side of the aisle to be any more than whiny brats. They no longer care about what's best for the country. It seems like most of their effort is put towards trying to bring the other side down than to bind together to bring us up. Both sides need to make concessions in order to make this work, and they simply aren't doing it. That type of political environment directly relates to confidence and the economy. Watching the way they handled both the government shutdown and the debt ceiling was absolutely appauling to me.

I think we're starting to see why a republic has never lasted 250 years before. It gets so convoluted. The laws and rules become outdated and useless. Personally, I'd love to see campaigns limited to certain amounts, that are put there by the tax payers. No more private interests in campaigning. I hate when I saw a completely unrelated law tacked to a bill that virtually can't fail to get it pushed through when it couldn't pass on its own merit. Vote on one issue at a time, etc.

I know that my views of politics are very simplistic, but more complicated doesn't always mean better.

The problem with our system is quite easy to identify. Politicians do not answer to constituents...they answer to their party. Politicians who are not part of a party have an insane uphill battle to election. All this talk of compromise at the political level is hogwash. None of them can be trusted to to what's right (compromise or not)...they only do what is needed to stay elected. Now back to the credit rating that 12th seems to think isn't important contrary to the rest of society (as indicated by the markets reaction).

The problem with our system is quite easy to identify. Politicians do not answer to constituents...they answer to their party. Politicians who are not part of a party have an insane uphill battle to election. All this talk of compromise at the political level is hogwash. None of them can be trusted to to what's right (compromise or not)...they only do what is needed to stay elected. Now back to the credit rating that 12th seems to think isn't important contrary to the rest of society (as indicated by the markets reaction).

This.

FRPLG, I didn't say the credit rating wasn't important. A credit rating agency, in my opinion, should issue downgrades or upgrades based on economic data; The models and metrics they've been using since the company was founded. Not politics. If you think I believe that the credit rating is somehow trivial, then I don't know what else to tell you.

Daseal, your post summed up exactly what my post said, except the part about the S&P. I maintain, they are a credit rating agency that issues ratings which forecast the credit worthiness of America's sovereign debt and it's ability to service said debt. Period. That's it. They have no business, whatsoever, making one mention of either party by name. I don't care if the White House is set on fire by the Tea Party tomorrow, S&P should stay the f*ck out of our political discussion and shouldn't issue debt forecasts based on the politics of the moment.

But if you want to take their downgrade for what it said, fine. I'm curious about where you stand on them calling for a raise of revenues three separate times; a position that one party was more than willing to accept as a part of an overall package, but there were no suitors on the other side of the aisle. They've pretty much said until revenues are a part of the mix, among other things, they stand by their downgrade.

What's more interesting is that market tanked another 600 points today, but treasuries held their own as investors fled for stability. That tells us two things: The market doesn't see inflation around the corner and it believes, contrary to the downgrade, that treasuries and bonds are a safe haven for investors for the immediate future.

With so much uncertainty, investors were leaving little to chance. Despite the downgrade of U.S. debt, Treasury prices rose, pushing yields lower, as investors fled into the relative safety of government-backed debt.

The yield on the benchmark 10-year U.S. Treasury fell to 2.34% from 2.56% late Friday.

"The Treasury market seems to be oblivious to the fact the U.S.' credit rating was downgraded," said Quincy Krosby, market strategist with Prudential Financial.