Posted by: arnegrim | August 8, 2011

S&P report on the US credit downgrade

“…We lowered our long-term rating on the U.S. because we believe that

the prolonged controversy over raising the statutory debt ceiling and

the related fiscal policy debate indicate that further near-term progress

containing the growth in public spending, especially on entitlements,

or on reaching an agreement on raising revenues is less likely than we

previously assumed and will remain a contentious and fitful process…

the resulting agreement fell well short of the comprehensive fiscal

consolidation program that some proponents had envisaged until quite


In addition, the plan envisions only minor policy changes on Medicare

and little change in other entitlements, the containment of which we and

most other independent observers regard as key to long-term fiscal



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