S&P Responds to Obama Treasury’s “$2 Trillion Error” Argument: It’s “Irrelevant”

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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  • HadEnough

    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……

  • Fever Pitch

    S&P must be racist.

  • rbosque

    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.

  • aprilnovember811

    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.

  • Patty

    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.

  • succotash

    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.

  • Barky


    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.”

  • Spikehb

    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.

  • StrangernFiction

    Drats, sock fail.

  • Nancy

    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.

  • Molon Labe

    The S&P is racist.

  • myohmy

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

  • No Man

    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.

  • jainphx

    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.

  • Bobbi

    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

  • Major Kong

    #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?

  • Buffalobob

    “I see stealth trolls”.

  • Ginger

    All Planned! Next!

  • Fu#kObama

    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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  • Scott

    Latest press release from the Obama Whitehouse concerning the debt downgrade, “Presidentin is hard.”

  • Major Kong
  • Who is in charge of the clattering train?
    The axles creak and the couplings strain;
    And the pace is hot, and the points are near,
    And Sleep has deadened the driver’s ear;

    And the signals flash through the night in vain,
    For Death is in charge of the clattering train.


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  • Ipso Facto


    Everyone should realize exactly what’s going on because we are approaching a tipping point and our country as we know it is hanging by a thread. The Democrats are clearly in a race to expand the government, and hence their constituency, beyond the point of no return for us. The credit rating downgrade means nothing to them because they are on a mission.

    The Democrats know they need to pump out entitlements and benefits to keep their people voting. Their constituents are not ideologues like the party elites – they are parasites. As soon as the benefits dry up, their people won’t turn around and vote for the Republicans, however, they will stay home come election day if they aren’t getting regular checks in their mailbox.

    The Democrats know they are bankrupting the country right now, however, they don’t care about that just yet. They are desperately trying to increase their constituency to the point where they can institute either Cap and Trade or a big VAT (or both) which will finance their socialist benefit programs eternally, and they will argue these programs are needed to bring in the revenues to get our financial house in order.

    That’s why they don’t care about the debt or the deficit or our credit rating. They are trying their best to obscure the real issues TO BUY TIME!

    Stop worrying about the merits of all the absurd arguments they are making. These arguments are all part of an elaborate smokescreen to keep us distracted from the real issue. If we don’t stop the Democrats in their tracks NOW – we are all going down – BIGTIME! This is not a time for bipartisanship. Its a time to use the nuclear options we have available to us to flat out STOP the Democrats in their tracks right now, before they have gone too far.

    They want to institute Cap and Trade through the EPA without the approval of Congress. If they do this, they will create a vast bureaucracy much bigger than Obamacare. All of the people working for what they will present as the salvation of our environment, will actually be working to keep the Democratic party and Obama in office so that they can continue to increase government (and their constituency) to the point where we will NEVER be able to stop them.

    Watch for the Democrats to use the credit rating downgrade to institute some of these programs very soon – its inevitable because they know that if Obama loses in 2012, they will never have another chance to take over the government for another 20 years – if ever. If he gets elected again its game over man.

  • Militant Conservative

    I’m looking it up, but I think the president in 1917

    Was Woodrow Wilson yet another socialist.

    Yup, binged it and I’m right. Wilson 1913-1921.

    Gee, roaring 20’s what was that??? Harding cut

    Taxes and corporate taxes and slashed the size of

    Government. He died and Coolidge kept the same

    policies. Demonstrable evidence that Obama is a

    Socialist destroyer of wealth. Harding, Coolidge,

    Reagan created wealth. History is a pesky thing.

    Points out the retards, Wilson,FDR,Carter and Obama.

    Which group do you want to associate with??

    Powder is dry and so is history.

  • squeaky

    i noticed this earlier this week………italy seizing records from Moody’s and S & P offices in an investigation.

  • LL

    I don’t blame S & P.

    I blame George W. Bush. I also blame bush for the 1929 Stock Market crash even though he wasn’t born. I blame George W. Bush for the Bubonic Plague that wiped out 1/2 of the population of Europe in the 13th and 14th Centuries. And I suspect that George W. Bush was behind the crucifixion of Jesus Christ and Satan giving ‘the apple’ to Eve.

    The ObamaNation is blameless. The 28% increase in government spending during the Obama administration has been an act of a genius – spending other people’s money instead of ‘your own’. However it seems that we may have run out of other people’s money – and yes, for that small detail, we should blame George W. Bush.

  • Militant Conservative

    Liberals intent is more honorable than the outcome.

    The road to he’ll is paved with the same intent.

    Thus Obama is Satan.

    Powder is dry

  • bless_israel_now

    Will Israel provide the USA with financial aid?

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