AAA rating down the tubes
As noted by CNN, Standard and Poor have downgraded the credit rating for the USA from its AAA rating that has been enjoyed since 1917. This downgrade impacts upon the cost of borrowing.
After reading through the reasons given for the downgrade I feel quite bothered, because it would seem that the ratings agency has taken into consideration a few things that are none of its business, or at least poorly understood, or more likely is based upon the leftist viewpoint of the person doing the assessment.
A list of the reasons for the downgrade are:
1. the kabuki theatre regarding the raising of the debt ceiling re the fact that it took to the last minute to get it raised. The political brinkmanship has proved harmful.
2. the fact that the tax scales for upper income individuals remained rather than allowing them to lapse. The claim that this could have raised $950 billion in revenue might in fact be a little bit on the bloated side.
However, I question this evaluation, at least in the short term. The reason that I question the evaluation is that it seems to be very political with regard to the assessment. For example the comment about the debt ceiling being raised in the past. Is that totally relevant, especially when the raising of the debt ceiling is not going to do anything to help cut the GDP ratio? Also, where is the analysis that the tax measures in question would have seen a rise in the tax revenues collected? The argument that was used smacks of left-wing politics, and it actually smacks of a left-wing assessment that is intent upon blaming conservative Republicans for the downgrade.
This article will be updated as more information from other sources becomes available.