Things aren't looking good, folks.
Sounding the alarm about the country’s deep fiscal problems, Standard & Poor’s on Monday downgraded its outlook on the U.S. credit rating to “negative," raising the likelihood the U.S. will lose its coveted 'AAA' rating as Washington struggles to fix its beleaguered balance sheet.
The move signals the seriousness of the debt crisis in the U.S., which at most times is considered the safest investment in the world. It is likely to increase pressure on lawmakers and the White House to bridge their wide gaps and could mark the first step to the U.S. losing the perfect credit rating that allows it to tap the capital markets at very low rates.
Historically, America’s credit rating had been seen as untouchable and among the safest in the world. “It is backed by a strong track record of prudent and credible monetary policy, evidenced to us by its ability to support growth while containing inflationary pressures,” S&P said.
However, spending has increased dramatically in recent years and, critically, tax revenues have failed to keep up the pace.
S&P said the U.S.’s total government deficit fluctuated between 2% and 5% of gross domestic product, or GDP, from 2003 to 2008. Yet it has “ballooned” to more than 11% in 2009 and has yet to recover, S&P said.
“More than two years after the beginning of the recent crisis, U.S. policymakers have still not agreed on how to reverse recent fiscal deterioration or address longer-term fiscal pressures,” S&P credit analyst Nikola Swann said in a statement.
Hmmm. Deficit between 2% and 5% of GDP from 2003 to 2008. Deficit ballons to more than 11% of GDP in 2009. Why do those years jump out at me? What could have happened in 2009?
Holy crap, Batman! Can you say outta control in Washington?
The dollar's on its way to taking a huge beating. Deflated by out of control Obama spending. Now who would have ever seen that coming?