What were they thinking!!!
I agree with Treasury Secretary Tim Geithner
when he said the credit rating agency S&P
showed "terrible judgment in lowering the
US Government's credit rating from AAA to
AA+ for the first time ever in US history.
S&P has shown a lack of knowledge about the
basic US fiscal budget math and a lack of
concern for the free fall that their rash
Friday night actions will take.
Interviewed on CNBC, Geither said that U.S.
Treasury securities were just as safe now as
they were before S&P announced its downgrade. He predicted that China and investors would remain strong purchasers of U.S. government debt.
Republicans have blamed President Barack Obama
for the first-ever downgrade of the government's credit rating.
But Geithner said Congress owns the credit
rating because the Constitution gives Congress
the power to tax and spend.
The other two major credit rating agencies,
Moody's Investor service and Fitch Ratings,
have not lowered their AAA ratings, although
they have warned of a possible downgrade if
more is not done to deal with soaring federal deficits.
Remember, the rating agencies were sharply
criticized after the 2008 financial crisis for
continuing to give top ratings securities backed
by subprime mortgages. When the mortgages went
bad, investors lost billions of dollars and the resulting financial crisis sent the country into
a deeper recession. They rating the sub-prime
paper AAA.
The administration has also accused S&P of a $2 trillion error in its estimate of the size
Sheila McKinney
