United States Loses AAA Rating

You knew this was coming.

The United States lost its top-tier AAA credit rating from Standard & Poor’s on Friday in an unprecedented blow to the world’s largest economy in the wake of a political battle that took the country to the brink of default.

S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about the government’s budget deficit and rising debt burden. The action is likely to eventually raise borrowing costs 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 outlook on the new U.S. credit rating is “negative,” S&P said in a statement, indicating another downgrade was possible in the next 12 to 18 months.

The move reflects the deterioration in the global economic standing of the United States, which has had a AAA credit rating from S&P since 1941, and it could have implications for the U.S. dollar’s reserve currency status.

“The global system must now adjust to the many implications and uncertainties of the once-unthinkable loss of America’s AAA,” said Mohamed El-Erian, co-chief investment officer at Pacific Investment Management Co which oversees $1.2 trillion in assets.

The outlook on the new U.S. credit rating is “negative,” S&P said in a statement, indicating another downgrade was possible in the next 12 to 18 months.
http://news.yahoo.com/p-reconsidering-u-downgrade-cnbc-001207261.html

We are now on par with former communist countries.

This whole disaster could have been avoided years ago if the federal government stopped wasting tax money on pork barrel projects, foreign aid, outrageous entitlements, and more recently, the socialist bailouts, takeover of banks and  2/3rds of the auto industry, and ObamaCare.

Any country that borrows, spends, and wastes revenue the way ours does, doesn’t deserve a high rating.

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