It's happened then. Standard & Poor's has lowered its long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA'
Here's what the smart money has to say on the subject:
'Only time's going to tell how we're going to be affected. Interest rates that affect the U.S. government ultimately can ripple throughout the economy, which is not good news given our weak economic condition already'.
Former U.S. Comptroller General David Walker (CNN)
Treasury officials noticed a $2 trillion error in S&P's math that delayed an announcement for several hours.
'A judgment flawed by a $2 trillion error speaks for itself'.
Unnamed Treasury representative (The Wall Street Journal).
'This move should not be much of a surprise to markets, though the timing is at a point where market sentiment is fragile after the drop in stocks this week. What really matters is whether the markets are willing to ‘downgrade’ the U.S. bond market. As this week’s move showed, U.S. Treasuries remain the flight-to-quality asset of choice'.
Ajay Rajadhyaksha, a managing director at Barclays Capital in New York (Bloomberg)
'Americans expect to be No. 1 at everything. A downgrade is 'a great insult and humiliating to the country'.
Republican strategist Ron Bonjean (Bloomberg)
'Seriously, why would anyone care what the credit rating agencies think ? They hardly emerged from the financial crisis smelling of roses, did they ? Looks like a feeble attempt to try and regain some belated credibility. But the timing stinks - both because it's surely too soon to be making calls like this, and because market confidence is so fragile at the moment'.
Here Is The City
'I don't get it'.
Warren Buffett (Fox Business Network)
'Pardon me for asking, but who gave Standard & Poor’s the authority to tell America how much debt it has to shed, and how ?
If we pay our bills, we’re a good credit risk. If we don’t, or aren’t likely to, we’re a bad credit risk. When, how, and by how much we bring down the long term debt - or, more accurately, the ratio of debt to GDP - is none of S&P’s business'.
Robert Reich, former US Secretary of Labour and now a political commentator (Business Insider)
'I think S&P has demonstrated some spine; they finally got it right'.
Bill Gross, co-CIO PIMCO (Bloomberg)
'S&P has shown really terrible judgment and they've handled themselves very poorly. They've shown a stunning lack of knowledge about basic U.S. fiscal budget math. And I think they drew exactly the wrong conclusion from this budget agreement'.
Tim Geithner, US Treasury Secretary (NBC Nightly News)