S&P Downgrade

Commentary By Ron Beasley

I don't know why anyone would pay any attention to S&P anyway but here it is:

S&P downgrades U.S. credit rating for first time

Standard & Poor�s announced Friday night that it has downgraded the United States credit rating for the first time, dealing a huge symbolic blow to the world�s economic superpower in what was a sharply worded critique of the American political system.

Lowering the nation�s rating one-notch below AAA, the credit rating company said �political brinkmanship� in the debate over the debt had made the U.S. government�s ability to manage its finances �less stable, less effective and less predictable.� It said the bi-partisan agreement reached this week to find at least $2.1 trillion in budget savings �fell short� of what was necessary to tame the nation�s debt over time and predicted that leaders would not be likely to achieve more savings later on.

You can find the S&P statement here.

This is the part the Republicans and Conservatives won't be talking about:

Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act.

The reality is the US was downgraded because they recognize we have a dysfunctional government.