S&P Economist Explains Downgrade of US Rating

Tuesday, April 19, 2011

Standard & Poor's Headquarters in Lower Manhattan, New York City. Standard & Poor's Headquarters in Lower Manhattan, New York City. (Wikipedia Commons)

Standard & Poor's announced Monday that they have downgraded the United States' credit outlook from “stable” to “negative” for the first time since they began issuing those ratings in 1989. The new rating has been interpreted by many as a direct warning to the U.S. government to come up with an agreement on the debt ceiling and the federal budget — as quickly as possible. David Wyss, Chief economist at Standard & Poor’s, New York, and Louise Story, Wall Street and finance reporter for our partner The New York Times, explain what the rating really means, and what the U.S. can do about it.

Guests:

Louise Story and David Wyss

Produced by:

Valerie Lapinski

Comments [4]

listener

Dear Mr. D

"As for the deficit, CBO shows that over the first three years of the Obama Presidency, 2009-2011, the federal government will borrow an estimated $3.7 trillion. That is more than the entire accumulated national debt for the first 225 years of U.S. history".
WSJ - Jan. 27, 2010

Those "unpaid-for programs throughout the last administration" or the other 41 administrations do not approach what we are experiencing now and no amount of sophistry can excuse it. Thanks

Apr. 19 2011 05:07 PM

Dear "elephant-in-the-room,"

I think there's a bit more to the story than is evident from your comment. The "conservative politicians" whom you defend have a pretty easily identifiable pattern of waiting until there is a Democratic administration to start worrying about fiscal responsibility. Those same conservatives seemed eager to throw their full support behind unpaid-for programs throughout the last administration. I'm referring to the massive doubtfully-necessary military adventures, the de-regulation (that led to the credit collapse.. that in turn led to the worst recession in 80-odd years), the prescription drug benefit plan and the tax cuts for top tax brackets that were cornerstone policies of "conservatives" during the Bush administration. So, I think it's likely that conservative politicians are now being vilified for hypocrisy rather than fiscal conservatism.

Apr. 19 2011 03:09 PM
JFD8

S&P will no longer assure
Easy credit if Congress can't cure
An addiction to debt
While it hopes we forget
In the bubble its standards were poor.

News Short n' Sweet by JFD8
http://twitter.com/JFD8

Apr. 19 2011 10:15 AM
listener

The "elephant in the room" that "we are on an unsustainable path" is an alarm that has been loudly sounded by conservative politicians and activists for over two years and they were viciously mocked and vilified for stating that obvious fact based on simple math. Today those same conservative are still being demonized and now lectured on how they must compromise with the exact same people in the Democrat Party leadership that proudly brought us to the brink of insolvency.

Apr. 19 2011 08:39 AM

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