On Friday the United States lost its coveted AAA credit rating. Credit rating agency Standard & Poor’s downgraded the nation’s rating for the first time since the U.S. won the top ranking in 1917. 18 countries now have a better credit rating than the US.

In response to the historic downgrade, the Obama Treasury released a statement claiming S&P made a $2 trillion mistake.

Today the S&P fired back saying treasury’s argument “is irrelevant.”
Zero Hedge reported, via Free Republic:

Yesterday we showed that when it comes to projections, the CBO’s own track record makes S&P shine in comparison. Apparently this fact was not lost on S&P itself which sent out a note explaining which “clarified assumption used on discretionary spending growth.” Basically, as S&P says, “Our ratings are determined primarily using a 3-5 year time horizon. In the near term horizon, by 2015, the U.S. net general government debt with the new assumptions were projected to be $14.5 trillion (79% of 2015 GDP) versus $14.7 trillion (81% of 2015 GDP) with the initial assumption – a difference of $345 billion.” So yes, while by 2021 the difference could be $2.1 trillion based on the CBO’s current baseline model, the truth is that the CBO’s own estimate on revenue and spending projections in a decade will likely have a +/- $10 trillion margin of error. So does anyone really care? In essence all S&P did was point out what Zero Hedge and others have been saying: that a “deficit cutting” plan which is massively back end loaded and has about $20 billion in cuts over the next year is absolutely without credit or merit. And the disingenuity on the side of Treasury to believe that someone would think otherwise is simply appalling. That said, while the markets look set to crash very shortly, the overabundance of catalysts means that it will be more than just the downgrade that throws risk into a tailspin. Although prepare for an all out onslaught by the Treasury on S&P as a scapegoat. After all in USSAA(negative outlook) it is never our fault: it is always someone else’s.

 

 

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  1. Whats a few trillion $$ among a few Odumbo friends………..more or less it is all part of his paln to bring down this great country……

  2. S&P must be racist.

  3. Yes, itl be very entertaining to watch how many people Obama throws under the ‘ol bus. Bush, S&P, Tea Party, the weather, Klinger from Mash….

    Anyone but themselves. People should ask themselves: Who’s in charge? Obama. Because you know if the economy were great, he’d take all the credit.

  4. John Boehner, Mitch McConnell, and all of the other “Moderates” look shameful for that silly, deceitful bill of theirs. The people are smarter that what is in this crime syndicate parading around as a legitimate government. John Boehner you need to resign from your position. Mitch McConnel, spending bills are to originate in the House. You had no business interfering in Cut Cap and Balance. Shame on you. Small men.

  5. Had their been real cooperation by both parties they could have reduced the debt by another 2 trillion. Since, there has been such a childish mentality created by the Obama and the democrats nothing could be done in which would satisfy S & P’s.

    And if the climate in Washington was more cooperative then S & P’s may not have downgraded our Nation.

    I feel our nation is in desperation and in dire need of Adults who intelligent and will never allow a President to set the air in Washington…those in Washington are polluted America and it seems this started long ago when Obamacare started.

    The name calling and the hate feed the parties and this has been a partial reason for the S & P decision.

  6. From day one Obama came out blaming Bush and he hasn’t stopped almost 3yrs. later. Unlike Harry(the buck stops here)Truman it is always somebody else’s fault. Now those darn hobbitts(S&P) are just wrong putting their boot on the neck of this administration. It would be very refreshing to see someone from this bunch of inept pols stand up,man up and take the blame for this mess. Ha! Dream on…I know.

  7. april,

    Look for the RINOs to respond as Ed Morrissey has here:

    “Republicans cut the only deal they could get without control of the Senate and the White House. Had they refused to take that deal, then S&P and likely Moody’s would have lowered the rating on Wednesday, and Republicans would be taking the blame.”

  8. Soros, at the other end of Obama’s Blackberry, is going to make a another fortune as he destroys our economy and currency like he did with England and Thailand.

    In the words of Mel Brooks, it’s good to be king! It sucks to be one of the peasants though.

  9. Drats, sock fail.

  10. Unfortunately, the “It’s not *my* fault” attitude is rampant. It is the cry of a small child who has not learned to take responsibility for his screw-ups. Too bad that these small children have been legal adults for years, but apparently never learned the meaning of personal responsibility.

    Funny. My kids are finally out of the nest (except for one who is underemployed because of the crappy economy and one who got downsized for the same reason and came home so he wouldn’t have to live under a bridge until he finds another job) and every one of the 7, including the two now at home, know that personal responsibility is something every competent adult should accept. Unless you are famous, or a politician.

  11. The S&P is racist.

  12. If you are looking for idiots, look no farther. We have lots of them in Congress.

  13. Tax Cheat Tim, the Bernank, and Obama have screwed up the USA.

    S&P credit analysts are not Obama-worshiping ideologues nor MSM propaganda liars.

    They will not swear to the kleptocrats’ moronic lies.

  14. What I can’t seem to wrap my arms around is that most here, and over the whole country, were aware of what is happening. My question: why didn’t Boehner and McConnell see. Are they that dumb? I don’t think so, and since when is doing whats right taking the blame. This country is upside down and being driver further over the cliff because the right thing is wrong. The left was going to blame us no matter what, and has for decades. Rush said they acted out of fear, I just don’t agree, they acted because the ELITES were complicit, there can be no other answer as it happens time and time again. We are not being served by our elected officials, and it’s time for sweeping changes. I preach term limits and it’s time to turn out all those people that have held office over twenty years, and there are so many of them. Imagine how this country would be served by people that are there for no more than six years.

  15. Maybe it’s time for Barry to throw Turbo Tim under the Bus. Wonder where all our money really went? Was Timmy born In Thailand? At least that’s where he grew up, with his Daddy and Stanley Ann giving Out micro finance loans

  16. #12 August 7, 2011 at 12:15 pm myohmy commented:

    If you are looking for idiots, look no farther. We have lots of them in Congress.

    Yeah, and you might be amazed at how many big demoRAT donors work for Goldman Sachs. other investment banks, Wall Street, and the ratings houses like S&P, Moody’s and Fitch. So, what is really going on here?

  17. “I see stealth trolls”.

  18. All Planned! Next!

  19. Next fight will be for the size of thetax increase, not how much to cut! The GOP is spineless. They will say that our nations integrity is at resk and that cannot be allowed to happen. It will be a ‘moral’ victory with all the smoke and mirrors to show true cuts and hard decisions are being made. In the end, the middle class gets Fu#ked by Obama with the willing accomplices in the establishment GOP. The no new taxes pledge will go right out the window as they did with Geo. Bush Sr.

    As piggy Roemer said “We are fu#ked”.

    Time to primary the the RINO’s! If your not angry your not paying attention.



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