S&P says it will not cut the US credit rating based on the failure of supercommittee to reach a debt reduction deal.
The S&P downgraded US debt in August 2011 due to US debt ballooning out of control easily blowing through the $14.4 T debt ceiling limit. The limit was eventually raised based on a belief the bipartisan supercommittee was going to come up with a deal to balance spending cuts with tax increases by Nov 23, 2011. The Supercommittee just announced they will not reach an agreement and this will result in automatic cuts in 2013. Yes, that is after the election.
One would think S&P would move to downgrade US debt in light of President Obama’s announcement that he will veto the automatic cuts. Nope, they will wait until 2013, clearly betting that Obama will be tossed out.
Is S&P compromised? They are still under investigation facing potential litigation and fines due to their subprime rating scandal. Now that there is no deal to cut the debt and Obama has told them he will veto the cuts, S&P says they will wait until 2013.
This is yet another example of politics and power over common sense. When will Americans awaken?