Thanks Barack… Obama’s Record Deficits & Debt Will Likely Cause a Downgrade in the US Credit Rating
Just think, in 2007 the national deficit was $162 billion.
That was before Barack Obama tripled the deficit in a year.
The deficit will top a trillion dollars again this year. (The Captain’s Comments)
Now it looks like the credit rating agencies are likely to downgrade the US credit rating from AAA to AA.
The Daily Beast reported:
Only seven days stand between the U.S. and the effects of a credit default. But a downgrade of the nation’s stellar AAA credit rating seems a lot more likely, and a lot sooner.
The White House had been alerted repeatedly over the past month by rating agencies that without a strong, long-term plan to restructure the country’s debt, they would lower America’s credit rating as soon as this Friday, according to two officials familiar with the process. The White House was warned that the deal would have to be significant—and not a short-term fix over the next few days to avoid a credit drop.
Analysts with Moody’s and Standard & Poor’s, the nation’s top two rating agencies, declined to be quoted on the record, indicating that even benign statements about timing and ratings decisions can rattle markets and startle investors. But earlier this month, both agencies placed the U.S. government on notice of a downgrade of at least one notch, if not more, to a AA rating. In a written statement, S&P analysts said they believed “there is an increasing risk of a substantial policy stalemate enduring beyond any near-term agreement to raise the debt ceiling.”
On that point, both agencies have been right. Having gotten back on track last week, negotiations broke down again on Friday after Speaker John Boehner announced that he was backing out of White House talks because of a lack of trust. A frustrated President Obama held a brief news conference Friday afternoon calling the move “hard to understand.”
Efforts to raise the debt ceiling are back on track this week, but with decreasing good will between the parties. Senate Majority Leader Harry Reid had prepared a package carved almost exclusively around Republican demands, including major budget cuts and no tax revenues. Speaker John Boehner also crafted a package over the weekend that he could sell to Democrats, and perhaps more important, to his own caucus. But the parallel efforts indicate a widening divide between the parties and chambers, and a near-impossibility of bringing everyone together legislatively on one plan by week’s end.
Taking his message to the country Monday night, Obama stressed how unprecedented it would be to see a credit downgrade. If the debate heads much further, he said, “For the first time in history, our country’s AAA credit rating would be downgraded, leaving investors around the world to wonder whether the United States is still a good bet.” Just minutes later, Boehner responded to Obama. He didn’t mention the country’s credit, but accused Obama of repeatedly wanting “a blank check.”