US fiscal challenges downgrades standard of the poor, it had lowered the American long-term credit rating to AA-plus, involving political risks and a rising debt burden for the decision.
A report of the agency, “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.” This is the first time in history that United States has had its credit rating lowered.
“In general, the downgrade reflects our view that the efficiency, stability and predictability of American politics and political institutions in a time of fiscal and economic challenges during a degree higher than us when we presented a negative rating outlook weakened, April 18, 2011, “continued the statement.
The agency also said it is pessimistic that the debt would reach agreement between Democrats and Republicans to a “larger plan of fiscal consolidation.” And that if spending cuts in the agreement not to materialize, it would reduce the rating further in the next two years.
The government of President Obama has called the decision ‘flawed.” Both the New York Times and the Wall Street Journal reported that Friday morning, the S & P had instructed the Ministry of Finance with the news of the demotion and the Treasury for a $ 2000000000000 error in the rating agency approached the projection of debt.