Major Agencies Concerned About U.S. Credit Rating
- Posted on January 13, 2011 at 8:09am by
Jonathon M. Seidl
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Two major credit rating agencies are concerned over the United States’ credit rating, saying the U.S. must do something about its fiscal situation or face the fallout.
According to the Wall Street Journal, Moody’s and Standard & Poor’s Corp. are both “expressing concern over a deteriorating fiscal situation that they say needs correction.”
“We have become increasingly clear about the fact that if there are not offsetting measures to reverse the deterioration in negative fundamentals in the U.S., the likelihood of a negative outlook over the next two years will increase,” Sarah Carlson, senior analyst at Moody’s, told the WSJ.
“The view of markets is that the U.S. will continue to benefit from the exorbitant privilege linked to the U.S. dollar” to fund its deficits, Carol Sirou, head of S&P France, added at a Paris conference Thursday. “But that may change. We can’t rule out changing the outlook” on America’s debt rating in the future, she warned.
Currently, both agencies triple-A rating with a stable outlook, says the WSJ.
But “No triple-A rating is forever,” Sirou said.
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Comments (101)
TexasProgressive
Posted on January 13, 2011 at 9:51amNo, just trying to do my homework. What I said earlier is true but unfortunately with the Social Security Trust Fund, it actually has no real assets. The government, both Democratics and Republicans, have been “borrowing from the Trust Fund for years and replacing the money workers contributed into the fund with government bonds, basically government IOUs. For me to believe that Social Security is doomed to fail I would have to believe that the government will default on their bonds.
The Cato Institute has put forth what it calls the “6.2 Percent Solution” for reforming Social Security. Cato put this out around 2005.
Individuals would be allowed to divert their half (6.2 percentage points) of the payroll tax to individually owned, privately invested accounts. Those who chose to do so would agree to forgo all future accrual of retirement benefits under the traditional Social Security system.
The remaining 6.2 percentage points of payroll taxes would be used to pay transition costs and to fund disability and survivors’ benefits.
Workers who chose the individual account option would receive a “recognition bond” based on the accrued value of their lifetime-to-date benefits. Those bonds, redeemable at the worker’s retirement, would be fully tradable in secondary markets.
Those who wished to remain in the traditional Social Security system would be free to do so, accepting a level of benefits payable with the current level of revenue.
There are ways to approach this, one would be for the government to repay the money it “borrowed” for the Trust Fund, in effect repaying the money that workers put in. Another way would be to look at some form of privatization if that is what’s needed.
I should say that I plan on retiring in a year or so but I will not depend, or really even need Social Security, to do this. I was fortunate enough to be able to put back enough money for my own retirement. But the point is, working people of all income levels paid into this system for years and they should get some part of that money back.
The only reason that Social Security will add to the deficit is the government will have to pay back what it borrowed. If the government has to default on this loan from working people then it will not matter, we will all be going down the rabbit hole.
Report Post »tankerBigRed1
Posted on January 13, 2011 at 10:03amShell we say– WABBIT
Report Post »wscitgo
Posted on January 13, 2011 at 9:46amThe ratings agencies opinions are meaningless as they are just as corrupt as the banking oligarch. The problem with America is rooted in “money”, and cannot be solved unless understood by the majority, which is unlikely to happen. The primary reasons for my frustrations as a former Marine, defender of the constitution, and person with tremendous knowledge of the corrupt banking system is that the majority do not understand—REALLY UNDERSTAND—how the corrupt system works.
This morning while surfing zerohedge.com ( site everyone should read DAILY), I ran across an interesting youtube education serious by a patriotic, knowledeable citizen entitled “How To Take Our Country Back”. While I will argue that we cannot take a country back—-its gone—-I nonetheless believe that everyone should at least understand why our country is screwed, even if we cannot do anything about it.
Please watch these videos if you care at all to understand why the game is over—–last one out turn out the lights!
How To Take Our Country Back 1/3
Report Post »http://www.youtube.com/watch?v=8lVASkHDQNI&feature=related
How To Take Our Country Back 2/3
http://www.youtube.com/watch?v=JUdCXN-SWYQ&feature=related
How To Take Our Country Back 3/3
http://www.youtube.com/watch?v=uszhkTnc3G0&feature=related
Mr Sanders
Posted on January 13, 2011 at 9:44amCongress, Mr. President …. did you read that? Did you get it?
Do what you say & mean it. Unload your political bagage. Its time to act like businessmen & women.
How about this rule: Don’t spend another dime until you truly know where you are on the books. If you have no money in your PIGGY bank, start cutting. Once you show US you can actually make a few hard budgetary decisions, like cut more than just a few billion here and there (you know – SERIOUS MONEY) that are not motivated by the political, idealogical, Union, or Lobbist driven, then come to US with your issues. BUT! Don’t come crying to US and just tell US, unilaterally, that you, We The People, are gonna have to pony up for your mismanagement of OUR Government. We stand at the ready, We will help you. Afterall, WE’re all in this together, right?!!
Let’s GO! Get to work.
Report Post »noline
Posted on January 13, 2011 at 9:40amI’m Debt free, well stocked, and ready to make popcorn to watch the show.
Report Post »tankerBigRed1
Posted on January 13, 2011 at 9:38amLast I member– bone head Johnson & co decided dat there was no need to have a bunch of money in a trust fund- so used it up & replaced w/ bunch of IOU’S- “ what better to back up SS than the full faith of the US gov” or words to that effect– now since we are basicly bankrupt is that full faith going to come from the chicoms?
Report Post »chuck_wagon
Posted on January 13, 2011 at 9:32amPay off your debt, have food and ammo so when Cail, NY and IL collapse and take the fed with them shortly after you can sit tight in your home eating and protecting what’s yours. Let the libs in the cities fight it out in the streets. I’ll stay home for that one.
Surfndestiny
Posted on January 13, 2011 at 9:30amLMAO!……………………..
“Social Security, by law, cannot add to the deficit”
Social security is used to hide the real size of the deficit……………..
“The Social Security Trust Fund currently runs a $2.5 trillion surplus.”
Oh, sure………… 2.5 trillion is just sitting around and no politician will touch it to spend it……….
Politicians will never, ever steal from any retirement fund to balance their budgets will they?…….
States like Virginia, West Virginia, and others they will keep their promise, and payback what they took out of their retirement funds………….. I believe it……….. LOL!…………..
Report Post »tbtall
Posted on January 13, 2011 at 9:27amThis crowd in the Obama administration doesn’t care nor understand ratings, nor does it want stability. The more of a crisis, the greater chance for the revolution they are seeking. This is planned, and they want a crash so they can come in and declare a global currency solution.
expatinontariocanada
Posted on January 13, 2011 at 9:21amTP, you drinking the kool-aid again?
JohnQTaxpayer
Posted on January 13, 2011 at 9:11amTwo major credit rating agencies are concerned over the United States’ credit rating,
Oh silly people just do as da goberment do
do ta da do do do
Don’t Worry Be Happy
da ta do ta do
come on sing with me
don’t worry be happy
love the kids
Posted on January 13, 2011 at 9:08amThe real wealth report from Weiss research said this over 2 years ago. NO company could have the credit rating the US has with their financial situation.
Better late than never, but remember, they normally write this stuff AFTER it happens.
benrush
Posted on January 13, 2011 at 9:08amPeter Schiff is one of the few economists who knows what the heck he is talking about.
We could have a good credit rating forever if we understood the consequences of the Federal Reserve Act of 1913 and acted accordingly.
Which would be to repeal it forever and put the central bankers behind bars.
Surfndestiny
Posted on January 13, 2011 at 9:06amThese are the same credit rating agencies, that were saying everything is hunky dorrey with mortage bond ratings, right up to the collapse……………………………
So if they are griping about the USA`s rating now, it must, in reality stink to high heaven………..
Moodys should rename itself the Titanic band rating agency…………………
We continue to play lullabys, until we go under………………..
mhgadfly
Posted on January 13, 2011 at 11:20amWell stated, surfndestiny.
SEPARATION OF CORPORATIONS AND STATE
Report Post »stop freddie, fannie and the fha
SOCIALIZM IS MASS SLAVERY
don’t raise the debt ceiling
donh2
Posted on January 13, 2011 at 8:33amNot to worry, the credit raters will be intimidated into maintaing AAA ratings. They will all get pictures of the Tucson massacre mailed to them.
expatinontariocanada
Posted on January 13, 2011 at 8:29amBy design, people, by design. Spooky Dude, Cloward-Piven, the big/central banks…Just prepare because that‘s what they’re doing. That‘s the only reason the rug hasn’t yet been pulled out from under us. They’re not ready yet.
He died to make men holy, let us die to keep men free….
orcainohio
Posted on January 13, 2011 at 8:24amMillions of people are emulating the Us gov. spend like there is no tomarrow . the gov. taxes the thing they think are harmful ,booze, smokes, and savings.
Upsetcitizen
Posted on January 13, 2011 at 8:24amI geuss the future belongs to Glen Beck fans.I will watch our know it all democratic starve in the streets as i eat my year supply plus supply of food.
Report Post »DashRipRock
Posted on January 13, 2011 at 8:23amGive a man to fish (raise the debt cieling)
and he eats for a day.
Teach a man to fish ( cut spending)
Report Post »and he eats for a lifetime.
darlenekay
Posted on January 13, 2011 at 8:21amNow this is something we should be getting involved in and the news media should be reporting. Instead we are focused on what the First Lady was wearing at the memorial/pep rally last night, cross hairs that are symbolic of ‘we are targeting this race’, a phrase used by someone that is taken all out of context, blaming talk radio for shootings, telling the right to shut up while the left gets to trash us….I could go on.
Report Post »82dAirborne
Posted on January 13, 2011 at 8:21amCan you say “Balanced Budget?????”
Report Post »Lion420
Posted on January 13, 2011 at 9:36amIf this were “Jeopardy” I’d say…“What happened last time the GOP had a majority in Congress”?
Upsetcitizen
Posted on January 13, 2011 at 8:18am.What Glen Beck is right about the country’s deteriorating fiscal situation. All the credible left said that’s crazy talk, guess they were wrong again.
Report Post »grandmaof5
Posted on January 13, 2011 at 8:16amIf they had tuned into Glenn they probably would have known that many months back; he speaks for the good of the country, not of himself. If they tune in they may find out what is going to happen next and won’t sound so clueless.
Report Post »Mister President
Posted on January 13, 2011 at 10:21amBeck and others before him have been saying this stuff for a long time. To his credit, Mr. Beck was saying a lot of this stuff before I had ever heard of him and kept saying it even when people were trying to shut him up.
It‘s hard to make people listen to something they don’t want to hear. Usually they won’t listen until it becomes obvious and is too late to solve without any pain.
Report Post »jedi.kep
Posted on January 13, 2011 at 8:13amShouldn’t you have noticed that credit thingie a few years ago??? Stupid smart people.
Report Post »hempstead1944
Posted on January 13, 2011 at 8:11amWhat credit rating do you assign to a broke country?
Report Post »Mister President
Posted on January 13, 2011 at 9:44amAAA when the entire world is dependent on it.
Report Post »Old Truckers
Posted on January 13, 2011 at 2:00pmChina and other “mortgage holders” will foreclose on the debt.
Report Post »Foreign investors own this country just like your bank owns your house.
FreeIndeed
Posted on January 14, 2011 at 1:15amyup Arrogant asses assoc. has to stand for something.
Report Post »dwh320
Posted on January 13, 2011 at 8:10amWhat credit rating? I thought we lost that long ago.
Report Post »Sledgehammer
Posted on January 13, 2011 at 8:13amRight you are, I know we’re screwed! But this is not the end, we will pay off our debt. We will rebuild, on our original foundation.
Report Post »nuttyvet
Posted on January 13, 2011 at 8:19am@ Sledge – that would be nice but you know that nothing is going to change. The key word is business as usual and spending us into debt is the “usual” here. Additionally, someone has to figure out this Soc. Sec. thing. It is nice to hope though!
Report Post »captaincrunch
Posted on January 13, 2011 at 8:28amWe are the Roman Empire.
We have Gladiator sports in our coluseums (football) We have wealth beyond imagination, lands and houses.
We have and underclass of slavery (illegal aliens) We are masters of war conquering strange lands far from our borders.
We are Rome!
aafriend
Posted on January 13, 2011 at 8:31amExactly, what credit rating. if we have to much debt in our personal lives we are refused credit. this talk about our credit rating has been going on for years. nothing changes if nothing changes. we can talk till we are blue in the face, until truth is brought back to our government, nothing will change.
it takes courage, if we do not put politics, ideology, self interest aside, nothing will change.as Obama said, in the memory of that nine year old girl that died in Arizona, we must be an example. lets see if their words match there actions. its on tape, was on tv, now we will see. lets see if the next election season is civil and honest, and we don’t bankrupt this great Nation ! action speaks louder than words.
Report Post »shorthanded12
Posted on January 13, 2011 at 8:53amI thought Barry and all his rhedric and Tax Cheat Geithner and Benny “HILL” Bernanke said were in GOOD SHAPE. Sounds like Henry Paulson claiming the sky was going to fall if we dont pass TARP.
Report Post »NickyLouse
Posted on January 13, 2011 at 8:54amThe bigger you are, the harder you fall.
Report Post »mhgadfly
Posted on January 13, 2011 at 8:57amWe’ve already been downgraded by a very respected Chinese credit rating agency:
http://blogs.telegraph.co.uk/finance/ianmcowie/100008566/leading-chinese-credit-rating-agency-downgrades-usa-bonds/
Our economy is on life support and whorestreet is doing everything in its power to keep plugging the ****, all the while painting a picture of “recovery”. Our credit rating agencies are nothing but minions of the banks and the treasury department and do nothing but act as a rubber stamp. If our credit rating were lowered (as it should be), interest rates would immediately go up and the supposed housing recovery would vaporize and the banks would be back to creating new accounting standards to hide more losses. Understand, the big money has been doing its own analysis for some time now as they know the credit rating agencies mean nothing anymore.
SEPARATION OF CORPORATIONS AND STATE
Report Post »stop freddie, fannie and the fha
SOCIALIZM IS MASS SLAVERY
don’t raise the debt ceiling
shorthanded12
Posted on January 13, 2011 at 8:57ammanufactured Crisis. HMMM TARP, STIMULAS BILL, OBAMACARE, CASH FOR CLUNKERS, H1N1, OIL PRICES thats to name the ones we know, wonder whats behind door # 3 ????
Report Post »TexasCommonSense
Posted on January 13, 2011 at 9:28amSledgehammer, that may be hard to do if the dollar loses its reserve currency status. Many people think it can’t happen, but that’s what the British thought about their sterling when it used to be the reserve currency.
Report Post »Polwatcher
Posted on January 13, 2011 at 9:38amWhen the credit rating of the USA is formally lowered, I can hear it now…the politicians (seriously) will try to blame us for all their spending. They will say they had to do it because we demanded it. I now have a new yardstick to gage when this country will recover. Recovery will begin when politicians like Pelosi get voted out of office by their constituents but no recovery will happen until then.
Report Post »Mister President
Posted on January 13, 2011 at 9:41amUS Debt is still rated AAA (the highest rating possible), if for no other reason than to downgrade it would cause an economic and financial catastrophe much worse than that of 2008.
It really is amazing how quickly all of this has happened. Not ten years ago the very mention of a collapsing America would’ve sent you to the psych ward. To even fathom a downgrade of US debt would’ve caused the ratings agencies to laugh at you and fire you. However, we’ve known about all these budget problems from entitlements and job losses from NAFTA and free trade for a very long time now. That’s what Ross Perot ran on in 1992.
Ross Perot 1992 ads: http://www.youtube.com/watch?v=wcEMDks9_Vw
If only our parents and grandparents had cared more about our futures than their presents, President Perot would’ve taken care of business. I was only six that year, so don’t blame me.
Report Post »exdem
Posted on January 13, 2011 at 9:47amFundamental Transformation- Make Americans poor, hungry, cold and limit freedom
Take America as a Nation and make it weak on terrorism
Ruin its credit, blow up deficit, destroy its businesses and
Start a class war- all in 2 years
If Obama is re-elected we are finished
APatriotFirst
Posted on January 13, 2011 at 9:51amQuestion, because I need to learn and know.
What happens to everyone who owns gold, when the govt. passes a law that you can’t own it? Was done once before, wasn’t it?
Please on rants and raves here, just honest answers that I can learn from. TY
Polwatcher
Posted on January 13, 2011 at 9:53amWhen the US dollar goes down, Bernanke, Geithner, Obama, and all their buddies, will retire to their tropical isle estate while waving to us and saying “bye bye suckers”.
Report Post »Mister President
Posted on January 13, 2011 at 10:06am@APatriotFirst
I believe FDR did that.
You just hide your gold and don’t turn it in.
Report Post »shorthanded12
Posted on January 13, 2011 at 10:23amI heard this information on a morning talk show out of Raleigh, NC this morning. (106.1 WRDU)
Report Post »Please do you homework on this one. Im not a home mortgage expert but I did understand how they explained it. Well you know that peaceful loving religion (Islam) getting what they call ” SHARIAH-COMPLIANT” HOME LOANS. Any decent American home owner will BOIL with discuss over this one. From what I heard a few States “Housing Authorities” are involved with this, some major banks have resisted getting involved claiming there to hi risk. LOOK INTO IT..just another reason why this Government is taking us to the brink of disaster.
Promotefreedom
Posted on January 13, 2011 at 10:25amThe Credit Rating agencies are in bed with the government/banks/elites. Remember the AAA ratings on ALL those mortgage backed securites that were really junk (that lead to the massive bank bailouts)?
Considering that the demise of the US is planned… Did anybody consider that “when the time is right” that all it is going to take to collapse the dollar is a timed degrading of the US credit rating? Then there will be a rush to dump our bonds, and then it is OVER.
Report Post »ironcowboy
Posted on January 13, 2011 at 11:04amI don’t know that I would accuse the USA of being a roman empire, I mean the Roman’s had bajjs! They fed people to lions… we are much too kind to our enemies. If I had to guess, I’d say we are rapidly turning into a Greek neighborhood. Back in WWII, I’d say roman empire, today, I’d say were approaching the Greek neighborhood status. Pass the ozzo man!
Report Post »ironcowboy
Posted on January 13, 2011 at 11:12amOh man… I remember voting for Perot, those were some exciting days. If only he had not dropped out, and then come back in… That action torpedoed much of his base. Sadly, Ross was what gave up Clinton. Ross took more of the popular vote away from Bush, than there was margin of difference between Clinton and Bush. Even is 80% of Perot voters has gone Bush, there never would have been a President Clinton!
This is a lesson us older Tea Party member have burned into our minds.
Report Post »We must churn up the Republican Party from the inside and place solid constitutional conservatives on the ballots in the primaries! It’s the only way to prevent third party vote splitting in the General Elections.
snowleopard3200 {cat folk art}
Posted on January 13, 2011 at 11:17amRight now, we have hit the wall and are about to go over the cliff; the price for the piper will be paid in full, one fashion or another. Yes, we will survive, and we will recover unto a greater nation, the best days are ahead of us yet; they will be based on what we build today as the foundation of the tommorow.
The storm is here, and it is delivering a fierce wind with the full wrath to soon strike; yet the shelters are built, and are strong. We Will Win in the end, and restore this land.
Report Post »oldguy48
Posted on January 13, 2011 at 12:15pmShocking! Don’t they know that Tinkerbell and her Pixie Dust can fix this! What a party they are going to throw!!
Report Post »23
Posted on January 13, 2011 at 12:24pm@apartiotfirst
Report Post »FDR – 1933 signed executive order 1602 requiring all holders of “modern” gold to turn their gold into the treasury. they got paper money in exchange. “Ancient” gold, like the collector gold coins that GB is buying did not have to be turned in. Any prez can invoke EO1602 – or just write a new one.
Polwatcher
Posted on January 13, 2011 at 2:42pm@Apatriotfirst,
If all else fails, sell the gold in Canada. The Canadian currency should be good.
Report Post »lionslayer44
Posted on January 13, 2011 at 7:59pmexactly! what credit rating? we should stop importing crap from china and start manufacturing what
Report Post »Americans need right here like a United States. default on china. by the way we should also tell the world that since we are borrowing the money to fund all these wars with chinese money that the world should really be telling china to stop the wars. thought it would be an interesting twist!
ChiefGeorge
Posted on January 14, 2011 at 12:46amWe are running on empty, running blind, running into the sun. Wait thats a song I heard. Seems like whats going on though. But didn’t the fed recently announce they made some billions back in investments already. What gives?
Report Post »FreeIndeed
Posted on January 14, 2011 at 1:14am@Apatriotfirst
There is a part in Revelation where it says that in the Tribulation people will cast their gold and silver in the streets….
so even if the govt doesnt steal it from you, the new world order currency they concoct will be obsolete. Also, the mark of the beast will be the only thing that will let you buy anything.
Report Post »sWampy
Posted on January 14, 2011 at 11:32amHurray, I’m a liberal idiot, I’m for the other team. ;-(
Report Post »DashRipRock
Posted on January 13, 2011 at 8:38amThats simple
a. we have twenty times more gold in reserve than china (about 20% of our ag currency)
Report Post »b. we have everyone elses gold reserves in a vault under the fed (except for England they came and got thier gold in 1964)
c.we are the BIS ( thats Bank of International Settlements for you Paul’ers)
mhgadfly
Posted on January 13, 2011 at 9:34amThis has already begun to happen at a pretty rapid pace. When China and Russia decide the dollar days are over, you know we are in trouble:
http://www.chinadaily.com.cn/china/2010-11/24/content_11599087.htm
SEPARATION OF CORPORATIONS AND STATE
Report Post »stop freddie, fannie and the fha
SOCIALIZM IS MASS SLAVERY
don’t raise the debt ceiling
DashRipRock
Posted on January 13, 2011 at 11:49amAll China did was put the ruoble up on its commodity index
Report Post »you know like how we have the Brittish pound on ours