Posted on 07/25/2011 11:42:14 AM PDT by Ernest_at_the_Beach
Goldman Sachs suggests a downgrade of U.S. credit is increasingly likely and experts continue to warn that a weakened credit rating would have significant financial repercussions in the markets, but at least one member of Congress has accepted that a downgrade might be deserved.
“Until we stop spending more, we should be downgraded,” Rep. Darrell Issa (R-Calif.), chairman of the House Committee on Oversight and Government Reform, said this morning on the Fox Business Network.
The Hill reports more details:
The credit-rating agencies Moody’s Investors Service and Standard & Poor’s both put the nation’s triple-A credit rating on review for a downgrade this month. The agencies warned that the U.S. might lose its perfect rating if the government defaulted on its debt or failed to take steps to address the deficit.
“If America can, in fact, pay its bills, it’s AAA. If we can’t pay our bills, it doesn’t matter what rating they give us,” Issa said. “Right now we can pay our bills, but we’re heading toward the kind of spending and debt to where someday we wouldn’t be able to pay our bills, and that’s what’s gotta change.”
Like many Republicans, Issa also indicated he does not consider Aug. 2 the drop-dead deadline to raise the debt ceiling. “[Obama] signed funding through September months ago,” he said.
Debate continues about what effects a credit downgrade could have. Some Wall Street traders say discussion about the potentially devastating effects is “much ado about nothing,” and Reuters’ James Pethokoukis says the impact would not be “as frightening as I might have assumed.”
(Excerpt) Read more at hotair.com ...
I suppose we could drop to a DDD credit rating and so long as Europe was still racing to remain two steps below us, not much would change.
Dropping from AAA (stable) to AA+ (no opinion) would be a DISASTER in the financial markets short term. Long term, it might, MIGHT, pull people inside the belt way’s head out of their butt.
Finally someone tells it like it is!
The bond markets want to see a competent financial plan. One NOT written by spoiled, whiney 13yo little girls!
Cut the damn spending and rein in size and flab in govenment. THAT’S a AAA plan!
bump for later.
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