Ratings agency S&P downgrades outlook for US government debt

S&P, along with Moody’s one of the two major credit rating firms in the US and internationally, left little doubt that it was intervening in the official political debate over the budget for fiscal year 2012, which begins October 1, 2011, as the representative of Wall Street. In effectively issuing an ultimatum to the Obama administration and Congress to pass legislation imposing unprecedented cuts in social programs with devastating implications for working people, S&P was applying to the US the tactics employed by it and other rating agencies and the international banks to force through brutal austerity measures in Europe.

Over the past two years, strategic credit warnings and downgrades on the sovereign debt of countries such as Greece, Ireland, Portugal and Spain have been used to encourage speculative attacks on those countries’ credit and whip the respective governments into line. By fostering an atmosphere of intense crisis, these moves are intended to create more favorable political conditions for overcoming popular opposition to the gutting of social services, jobs and wages.

This is the first time in its 70 years of rating US debt that S&P has lowered its outlook for the US. Over this period, the US has always maintained the highest rating of AAA. Were its debt to be downgraded, the implications for the American and world economy would be far-reaching and convulsive. US Treasury securities have long been considered the safest investments in the world and are held in the trillions of dollars by banks and governments internationally. Their credit-worthiness is bound up inextricably with the role of the US dollar as the leading world reserve and trading currency.

via www.wsws.org

Comments

[Gold_tracker]

Not a whole lot of ways to spin this as good news. It isn't the sort of item you want all those buyers of US debt to have to consider.

[John Steinsvold]

An Alternative to Capitalism (which we need here in the USA)

Several decades ago, Margaret Thatcher claimed: "There is no alternative". She was referring to capitalism. Today, this negative attitude still persists.

I would like to offer an alternative to capitalism for the American people to consider. Please click on the following link. It will take you to an essay titled: "Home of the Brave?" which was published by the Athenaeum Library of Philosophy:

http://evans-experientialism.freewebspace.com/steinsvold.htm

John Steinsvold

Perhaps in time the so-called dark ages will be thought of as including our own.
--Georg C. Lichtenberg