Military Superpower and “Money Printer In Chief “: America Loses AAA Credit Rating….
by Washington’s Blog
August 6, 2011
We Americans have always thought we were different.
We thought we could launch unnecessary, imperial wars worldwide …
While we slashed taxes for the wealthy and big corporations
While we threw trillions at our big banks
We thought that somehow we could get away with spending like a drunken sailor, while not doing anything to stabilize our economy (which in turn deepened our debt even further).
We were wrong. See this, this, and this.
America Loses AAA Credit Rating
Today, one of the big 3 rating agencies – Standard & Poor’s – downgraded America’s credit from AAA to AA+ … and put the U.S. on negative outlook for a potential further downgrade in 12 to 18 months.
S&P has been warning this might happen for years.
As Reuters reported in 2008:
The $85 billion bailout of AIG on Tuesday by the U.S. Federal Reserve “has weakened the fiscal profile of the United States,” S&P’s John Chambers told Reuters in an interview.
“Lack of a pro-active stance could have resulted in further financial stress and put pressure on the U.S. triple-A rating,” Chambers said. “There’s no God-given gift of a ‘AAA’ rating, and the U.S. has to earn it like everyone else.”
And as I noted the same year:
A September 18 article in Bloomberg raised the possibility of a credit downgrade for the U.S.:
America’s credit “profile is now weaker because contingent risks have become actual risks to the U.S. government,” said John Chambers, managing director of sovereign ratings at Standard & Poor’s in New York.
In fact, Standard & Poor’s raised a possible downgrade of U.S. credit back in April. An article in Marketwatch explained:
The performance of government-sponsored enterprises like Fannie Mae could have a direct impact on the national economy and more importantly, the credit standing of the U.S., Standard & Poor’s said Monday.
Fannie and Freddie, which enjoy implicit government guarantees, could cause the U.S. to lose its sterling triple-A rating if the government were forced to come to their rescue, the ratings agency said in a report.