Saturday, August 6, 2011

US Credit Rating Downgraded!

Important: United States of America Long-Term Rating Lowered To 'AA+' Due To Political Risks, Rising Debt Burden; Outlook Negative
As Joe Biden might say, this is a big F-ing deal! And very bad news for taxpayers, however expected. ~Bob. Excerpt: We have lowered our long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA' and affirmed the 'A-1+' short-term rating. We have also removed both the short- and long-term ratings from CreditWatch negative. 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. More broadly, 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. (The U.S. is no longer the premier economy in the world, and we have become a laughing stock in much of the world. The debt fiasco last week between Congress and Obama set the stage for this downgrade, but Obama is the main problem as he has been on a spending spree for the last 2 1/2 years. This is the first President who has had a rating downgrade. There must be structural spending reform to solve our fiscal problems, but this will not happen as long as the Democrats control 2/3 of the government. In addition, Obama’s socialist ideology will preclude any positive changes between now and the 2012 election, so it is going to be a problem for many Americans who will need to borrow money. This is will not be good for our US debt payments as interest rates will rise. Our annual interests payments are headed very quickly toward $1 Trillion. This may also impact the stock market Monday, which has already taken a huge hit this week. Hopefully, this downgrade will be just another reason Obama is defeated in the 2012 election. The Treasury Secretary should be fired now. -- Geoff Higginbotham, MGen USMC (Ret.))

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