Even if they reach a compromise and we avoid a default, prospects are growing that we will get hit by a second bullet: a downgrading of our AAA credit rating.
Standard and Poor's, which rates securities such as U.S. bonds, has made increasingly clear that it is looking for more than a resolution of the debt-ceiling fight. It also wants the resolution to be built on a credible plan to reduce deficits by $3 trillion to 4 trillion over 10 years.
Well-informed people now think that a credit downgrade is a near certainty. And that could bring some of the same damage as a default: higher interest rates, troubles in banks and state governments and a blow to American prestige.
Americans are rightly angry, frustrated and more than a little scared by this debt fight. It has only confirmed that our politics have taken a terrible turn. And how striking it is to have an emergency that has not been caused by our foes -- but is entirely a self-inflicted wound.
http://edition.cnn.com/2011/OPINION/07/26/gergen.debt.solution/index.html?hpt=hp_t2
:eek:
Standard and Poor's, which rates securities such as U.S. bonds, has made increasingly clear that it is looking for more than a resolution of the debt-ceiling fight. It also wants the resolution to be built on a credible plan to reduce deficits by $3 trillion to 4 trillion over 10 years.
Well-informed people now think that a credit downgrade is a near certainty. And that could bring some of the same damage as a default: higher interest rates, troubles in banks and state governments and a blow to American prestige.
Americans are rightly angry, frustrated and more than a little scared by this debt fight. It has only confirmed that our politics have taken a terrible turn. And how striking it is to have an emergency that has not been caused by our foes -- but is entirely a self-inflicted wound.
http://edition.cnn.com/2011/OPINION/07/26/gergen.debt.solution/index.html?hpt=hp_t2
:eek:
