USA credit rating drops

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S&P credit rating decreases from Triple A to Double A. Is the worst yet to come?

Do you see the Four Horsemen yet?



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I found it an interesting story. I honestly feel that it was unavoidable at some point and simply a matter of time. I hope this is a wake-up call for the US government. Tax rises and spending cuts are unavoidable, and maybe now both parties will see that they have to stop behaving like children if they want to keep the US economy on track.

I worry about higher interest rates and the government spending too much on it and increasing the debt in order to offset it. That type of thing.

I would go for the spending cuts first, because the Democrats have a poor track record when it comes to following through with cutting spending (unless it is screwing over the troops).

What we need is a balanced budget Constitutional Amendment.

Good our economy will have to collapse for things to improve because of how f*cked up the system is.

I can't believe that they didn't lower it years ago and a lot more! The US government is a both unconstitutional and massively corrupt, and it has been for decades.

Taxes need to be raised at some point. Cutting spending is important but there's no reason why revenues shouldn't be allowed to increase. The negative effects of raising taxes are overestimated.

Also, I'd like to remind you that Clinton managed to balance the budget after raising the debt ceiling. It's two costly wars, a bailout and a tax reduction later that any semblance of balance is gone.

A balanced budget amendment would not necessarily be a good thing. You need to be able to do some anticyclical investment in recessions. The problem is that government all across the world have failed time and time again to implement cuts during booms.

We've been watching the DOW now take a good hit, the question is, will congress now follow up on all of these measures and even try to cut more. As for the tax issue its sticky, obviously the loopholes need to be closed as first matter of course.

Strange that its just one rating organization taking this view. Most probably something to do with the republicans. Obama knows the vultures are circling.

I'm pretty sure others will follow.

I was wondering about that! Can the world bank lower the rating? What happens if it does? Is that the one that matters the most?

S&P was pretty clear - at least in one article - that their lowering was because they believed that the current budget cuts were too shallow to correct the problem and that the republicans were to blame for not allowing taxes to be raised. Two ways to look at that - it could be the republican's fault for not conceding to a halfway point, it could be the democrats fault for the republicans having a plan that works in whole but not in pieces and only letting them have the whole thing.

While I'd be happy with removing tax credits and many deductions, raising taxes is not the only way to raise revenue. Right now, the biggest thing holding federal revenues back is not the tax rate, but the weakness of the economy. Reversing some of the policies that keep the economy weak should be the first order of business.

That said, we should also keep in mind that AA+ is still a pretty darn good credit rating.

I read on verizion news that 1500 millionares dont pay ANY income taxes, However I have to pay 545.oo in a combination of state and federal and I make less that 25,000 a year. that's just f**ked up.

Exactly. That's why it's the tax credits and deductions that need to be targeted. Raising the percentage rate on people who actually report and pay taxes on $1,000,000 of taxable income, as Obama suggests, will still leave those 1500 millionaires paying no taxes at all.

And maybe if we close the loopholes, we can afford to cut the rate that people like you have to pay. Something simpler and fairer would be better for the economy than the current byzantine system, where there's often more benefit to spending time finding tax breaks than there is to spending that time on something productive that actually helps the economy.