S&P has dropped the U.S. credit rating from AAA to AA+:
The United States’ credit rating was cut for the first time when Standard and Poor’s lowered it from triple-A to AA+, citing the country’s looming deficit burden and weak policy-making process.
Standard and Poor’s on Friday revised the nation’s rating downwards to a AA+ with a negative outlook, despite a push back from the White House, which said the rating agency’s analysis of the US economy was deeply flawed.
It was the first time the US was downgraded since it first received a triple-A rating from Moody’s in 1917; it has held the S&P rating since 1941.
S&P further warned:
The outlook on the long-term rating is negative. We could lower the long-term rating to ‘AA’ within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.
Democrats own the downgrade. They fought Republicans and Tea Party supporters every step of they way, and forced a deal which was insufficient. They played class warfare and race politics against arguments that we needed to drastically change our spending habits.
This is Barack Obama and Harry Reid’s crowning achievement.
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