Saturday, August 6, 2011

S&P Downgrade Included Errors But What Remains Is US Addiction to Debt

It's time for Americans to appreciate the situation we are on.  Austerity has come to our shore whether we like it or not.  While Moody has decided to keep the AAA rating on US debt, the Standard and Poor went to other way and lowered the US credit worthiness down one grade that also included a negative outlook.

And while the Obama administration has the right to be angry about a $2 trillion estimate that that officials considered too high, the S&P analysis in the end remained the same:  the federal government was addicted to debt and it was not dealing with the issue fast or serious enough.

According to CNBC, S&P was seeking a $4 trillion cut over ten years but the deal ceiling deal only reduced that amount by $2.1 trillion.  And as usual, Washington decided to kick the can down the road so to speak.

But coming out the downgrade showed just how political as usual continues.  The Democrats suggests that a "balanced approach to the issue, including cuts and revenue increases was the way to go while the GOP continues to focus on just cuts.

Interestingly, a Fox News reporter tweeted that President Obama was pushing for a $4 trillion cut before the Speaker back out of the deal.  Even this is interesting because Fox News is not really what you would call an Obama friend.

The bottom line is this:  The worrying aspect of today's situation is that no one in Washington is losing sleep over this.  That's what's worrying.

Source:  CNBC.

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