S&P Downgrades U.S. Credit Rating

[Shem]

First time this has happened in the history of the United States. S&P downgraded the United States' credit rating from AAA to AA+ just yesterday. This is a huge blow to our economy. However, Moody's and Fitch still maintain their AAA rating with us.

Credit rating agency Standard & Poor's says it has downgraded the United States' credit rating for the first time in the history of the ratings.

The credit rating agency says that it is cutting the country's top AAA rating by one notch to AA-plus. The credit agency said late Friday that it is making the move because the deficit reduction plan passed by Congress on Tuesday did not go far enough to stabilize the country's debt situation and that the policymaking is not stable or effective as needed to address the current economic challenge.

Source

Expect higher interest rates in the coming days.

 

[The Monkey]

GJ republicans. Now people all over the world has to pay more for their loans, and economic growth could be severely hampered.

 

[Dandan]

On CNN I heard the White house had a 2 Trillion dollar mistake which resulted in the downgrade. How the **** do you miscalculate 2 ****ing Trillion dollars?? I took economics in college and even I wouldn't miss that much money with reports

 

[xcellerate]

Guys it's okay, the ultra-rich still get to keep their tax breaks! Which they have promised us will be [strike]used to create jobs in their companies and so their tax breaks will trickle down to their middle class workers[/strike] kept in private offshore accounts so it will remain safe for their retirement and grand children.

 

[Stigmata]

Someone placed roughly a billion dollars in futures bond whatever things betting that the US would lose its credit rating. And then it did.

A billion.

 

[Krynn72]

I say we just start a new country. Lets gather up our military and take over Canada. Mexico can have the current USA.

 

[Mr Stabby]

All thanks to the teaparty, the real Americans.

 

[Shem]

Interview One:

Question: Is the United States going to lose its triple-A government bond rating and what happens when the credit markets are no longer willing to buy U.S. debt?
Timothy Geithner: Absolutely not, and that will never happen to this country.

Interview Two:

Question: Is there a risk that the United States could lose its triple-A credit rating? Yes or no.
Timothy Geithner: No risk of that.
Question: No risk?
Timothy Geithner: No risk.

Ouch.

 

[Acepilotf14]

I say we just start a new country. Lets gather up our military and take over Canada. Mexico can have the current USA.

Let's do it.

 

[Sulkdodds]

Well, I'm glad nobody sacrificed anything politically on the assumption that this would not happen if they conceded enough.

 

[MJ12]

Can someone explain what this means in lamens terms? Or what it means more directly? I vaguely understand that it has something to do with something changing our status for not handling our debt or something and that we'll have more taxes.

I am embarrassed to say that I only ever vaguely understand what any of this means, I totally admit my naivety. Hell, I remember never being told the US was in debt until I was a senior in high school (I remember a lot of other people not knowing about it until then either) and even then we only talked about it briefly in one or two class sessions.

 

[Shem]

It just means how likely our government is to pay back their loans. Since we're now at AA+, interest rates are going to go up because we're slightly less trusted than before by lenders.

 

[Krynn72]

Can someone explain what this means in lamens terms?

It has nothing to do with magic pendants, or magic at all really.

I'm not really sure what kind of consequences this entails though. Somebody in this thread mentioned higher credit card rates, but I don't know if that's true. Shem, is that for civilians using banks or US loaners as well, or just when the government borrows money?

 

[The Monkey]

^ Just when the government borrows money. But it affects the "public" as well, as most of the money, contrary to popular belief, is borrowed from its own citizens, rather than foreign governments or companies.

 

[Bad^Hat]

So what you're saying is the higher interest rates will... trickle down? :V

 

[Krynn72]

^ Just when the government borrows money. But it affects the "public" as well, as most of the money, contrary to popular belief, is borrowed from its own citizens, rather than foreign governments or companies.

So... they're going to borrow from us, at higher interest rates? We'll ultimately get back more money! Horray for economic decline!

 

[Tagaziel]

Actually, the government will have to borrow money at higher interest rates, meaning prices and taxes for you go up.

 

[Krynn72]

So we will pay more for the things we need in order to pay ourselves back for the money we borrowed from ourselves to pay for the things we need. Economics is awesome!

 

[Stigmata]

So we will pay more for the things we need in order to pay ourselves back for the money we borrowed from ourselves to pay for the things we need. Usury is awesome!

Minor correction.

 

[Dandan]

This was predicted that its going to be a 10 year recession. We're in year 4 right now, prepare for the long haul