Warthogg
04-18-2011, 03:19 PM
New York (AP) - Standard & Poor's Ratings Service cut its outlook Monday on the United States' sovereign debt, saying there is a one in three chance it will downgrade the rating on the debt in the next two years.
The agency lowered the long-term outlook to "Negative" from "Stable."
It reaffirmed its investment-grade credit ratings on the U.S. long- and short-term debt itself, but said the ratings are at risk from the country's growing deficit.
S&P said the U.S. has a high-income, diversified and flexible economy that has helped it to encourage growth while containing inflation.
But the country's ballooning deficit could offset those positives over the next two years.
The agency noted that the deficit grew to 11 per cent of gross domestic income in 2009. That is much higher than the average of two per cent to five per cent in the previous six years.
S&P said it has little confidence that the White House and Congress will agree on a deficit-reduction plan before the fall 2012 elections. By that time, the measures won't go into effect until the fiscal year 2014.
The time must be close for S&P to actually make the move to change their rating from "STABLE" (HA !!) to "NEGATIVE".
When FINALLY Japan's rating was lowered I did opine a move to lower US debt rating was prolly in the offing. Still think that is true. With the reduction in Japan's rating, S&P's lowering their long-term outlook on the US, can a lower credit rating be far in the future ?? I think not far at all.
Always good to remember that S&P, Moody's, etc., etc......all these basically worthless rating agencies are paid by the entities they rate !! No conflicts of course,
Wart
S&P said the U.S. has a high-income, diversified and flexible economy that has helped it to encourage growth while containing inflation.
Inflation is not "contained" just hidden. Easy thing to do when energy and food are not included in the core CPI.
The agency lowered the long-term outlook to "Negative" from "Stable."
It reaffirmed its investment-grade credit ratings on the U.S. long- and short-term debt itself, but said the ratings are at risk from the country's growing deficit.
S&P said the U.S. has a high-income, diversified and flexible economy that has helped it to encourage growth while containing inflation.
But the country's ballooning deficit could offset those positives over the next two years.
The agency noted that the deficit grew to 11 per cent of gross domestic income in 2009. That is much higher than the average of two per cent to five per cent in the previous six years.
S&P said it has little confidence that the White House and Congress will agree on a deficit-reduction plan before the fall 2012 elections. By that time, the measures won't go into effect until the fiscal year 2014.
The time must be close for S&P to actually make the move to change their rating from "STABLE" (HA !!) to "NEGATIVE".
When FINALLY Japan's rating was lowered I did opine a move to lower US debt rating was prolly in the offing. Still think that is true. With the reduction in Japan's rating, S&P's lowering their long-term outlook on the US, can a lower credit rating be far in the future ?? I think not far at all.
Always good to remember that S&P, Moody's, etc., etc......all these basically worthless rating agencies are paid by the entities they rate !! No conflicts of course,
Wart
S&P said the U.S. has a high-income, diversified and flexible economy that has helped it to encourage growth while containing inflation.
Inflation is not "contained" just hidden. Easy thing to do when energy and food are not included in the core CPI.