As much as Democrats have tried to compromise with Republicans, giving far too much on far too many issues. Democrats cannot be blamed for Republican refusals to compromise. Most experienced Republican politicians know this is just a game, but Republicans managed to elect a plethora of unqualified candidates, who are too ignorant to recognize the danger. By holding our creditworthiness hostage, Republicans are putting our credit rating in jeopardy.
Moody’s Investors Service warned Thursday that it might downgrade the United States government’s sterling credit rating if Congress did not increase the nation’s debt limit “in coming weeks,” putting a spur to the sputtering talks between party leaders and the White House on a plan to restore fiscal stability. The warning, from one of the agencies whose assessments of creditworthiness help determine interest rates, amounted to a stern reminder from Wall Street to Washington that global financial markets are watching the budget battle closely and that a standoff or brinkmanship could have economic consequences.
Both sides seized on Moody’s statement to reinforce their bargaining positions, with Republicans demanding that President Obama get more serious about deep spending cuts and Democrats saying that Republicans are risking a financial crisis in pursuit of an ideological agenda.
Moody’s said a review of the credit rating was “likely” in July, given that “the risk of continuing stalemate has grown.” Its warning followed a similar one from another major ratings firm six weeks ago, and it came as the administration met Thursday with both House Republicans and Democrats in search of a deal.
The treasury secretary, Timothy F. Geithner, met on Capitol Hill with House freshmen, including Republicans who have suggested that they see little or no risk in a showdown over the debt limit. Citing the Moody’s statement, Mr. Geithner urged them to support raising it or risk an economic crisis.
“We didn’t create this mess,” one Republican told Mr. Geithner, according to a person in the room.
Independent analyses have shown that more than half of the $14.3 trillion debt is from policies enacted during the past decade when Republicans controlled both the White House and Congress, and much of the rest from lost revenues and stimulus spending and tax cuts since Mr. Obama took office at the height of the financial crisis and recession… [emphasis added]
Inserted from <NY Times>
The debt is largely a Republican caused problem, so for Republican freshmen to say they are not responsible, while technically correct, is ludicrous, because they are pushing the same class warfare that caused this mess. Hopefully their Banksters will bear some sense into them.
10 Responses to “US Credit Rating in Jeopardy”
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How does Ramen noodles (made in California) for $3 a packet (1 serving) sound.
…and Granny’s cat food will cost more than that.
Hopefully, someone will knock some sense into their heads. Holding up the debt ceiling, when it was raised 7 times during the Bush admin with the wars “off the books” and no issues by either side is holding hostage our financial situation which is already precarious. Not raising the debt ceiling will cause a world wide financial crisis (worse than the one when the banksters crashed the economy) and NO ONE will lend us money anymore. Think about that for just a second – if no one will lend us money, then the “good faith and credit” of the US will be destroyed and we will not be able to survive this. 😡
Lisa, they’ll lend us money, but the interest will be an arm and a leg.
I learned more about economics in my one JC course than most of Congress currently knows. For them to even make this type of policy decision is ruinous.
So did I. My term paper was in how corporations externalize cost. It’s more true today than when I wrote it.
I learned , when I was very young ,- a looong time ago , a good credit rating is the most important possession one has , and it must always be protected, this very basic lesson in economics seems to have missed these spoiled brats—money is loaned in good faith—-
I agree Phyllis. My former wife destroyed my credit rating in the 1980s. It’s excellent now but recovering it took many years. May that not happen to the US.
the republicans will raise the debt ceiling. i don’t care either way. i do not think that the vast majority of united states citizens will be harmed if the republicans do not raise the debt ceiling. most citizens have negative savings, they are indebted more than they own. these citizens really cannot be harmed much if the debt ceiling is not raised. the individuals and entities that would be harmed are the financial sector corporations, large block stock and bond holders, and all the other freeloaders who identify themselves as wall street. that is why the republicans will raise the debt limit. who the hell are moody’s and wall street to warn and threaten the united states government? these corporations and so called businessmen all received bailouts? the united states government on behalf of three hundred million citizens should be pulling some corporate charters, these corporations attempting to coerce government policy are not existing for the benefit of the united states and it’s citizens, and may have their corporate charters nullified. these investor class individuals have forgotten their place.
John, I disagree that the majority of citizens would not be hurt. A US credit default would raise interest rates, devalue the dollar, and raise prices on the staples everyday people need to survive.