America's Cratering Economy - by Stephen Lendman
Slow-motion fiscal collapse perhaps explains its current state after decades of mismanagement, accelerated under Bush and Obama. The chickens are now coming home to roost big time, hitting ordinary people hardest, suffering under a protracted Main Street Depression. More on that below.
Last April 18, Standard & Poor (S & P) downgraded its rating on America to negative, saying:
S & P "affirmed its 'AAA' long-term and 'A-1+' short-term sovereign credit ratings on the US. (It also) revised its outlook on the long-term rating of the US sovereign to negative from stable....(W)e now believe (US strengths may) not fully offset the credit risks over the next two years at the 'AAA' level...."
"More than two years after the beginning of the recent crisis, US policymakers have still not agreed on how to reverse recent fiscal deterioration or address longer-term fiscal pressures."
S & P analyst Nikola Swann added that from 2003 - 2008, US debt ranged from 2 - 5% of GDP. However, it ballooned to over 11% in 2009 "and has yet to recover."
Swann also warned of "a one in three chance that the US could lose its AAA rating in two years because of its mounting debt."
S & P's entire statement can be accessed through the following link:
Note: S & P and other major credit agencies partnered with Wall Street speculation and grand theft because they're paid by the companies they rate. In fact, Washington, too-big-to-fail banks, other FIRE industry (finance, insurance and real estate) giants, and major rating agencies were complicit in fueling the bubble economy and crash by design, not chance.
They're in league again now, targeting entitlements for privatization, so Wall Street can rip off recipients for big profits, leaving millions unable to comply with their rules high and dry, and those who do will be defrauded.
April 18 was step one. Follow-up came on August 5, saying:
"We have lowered our long-term sovereign credit rating on the United States of America to AA+ from AAA and affirmed the A-1+ short-term rating....The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics."
"The outlook on the long-term rating is negative. We could lower the long-term rating to AA within two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case."
In other words, Wall Street wants deeper cuts, using S & P as its mouthpiece to demand them. Washington, in fact, needs this pressure to enact what's already planned - successive entitlement and other social benefit cuts until government no longer provides them. That's what this is all about.
The entire S & P statement can be accessed through the following link: