S&P says spending cuts far more important thanВ tax hikes in repairing Credit Rating.
The decision by Standard & Poor’s to downgrade the U.S.credit rating to «AA+» at once laments the possibility that cuts to entitlement programs will not materialize and the decreasing likelihood of new tax revenues.But it appears to give more weight to the need for more spending cuts, as it warns that a further credit rating downgrade is in the cards if the U.S.does not trim spending.
In contrast, while the report indicates that new tax revenues would help mitigate the debt crisis, failing to find these revenues does not immediately put the U.S.at risk of another downgrade.
Specifically, the report warns directly that a further downgrade to «AA» status could occur within the next two years if there is «less reduction in spending» than what was agreed in the debt ceiling agreement.S&P said one factor that could lead to this second downgrade is if the minimum $1.2 trillion in spending cuts under the debt ceiling agreement does not occur.В (read more)
В (NYT)В В [...] That anger reached its apex on Tuesday, when I wrote a column comparing the Tea Party Republicans to terrorists.The words I chose were intemperate and offensive to many, and I’ve been roundly criticized.I was a hypocrite, the critics said, for using such language when on other occasions I’ve called for a more civil politics.In the cool light of day, I agree with them.I apologize.I still think it was terribly wrong for the Republicans to use the threat of default to insist on ma*sive spending cuts, though President Obama also deserves blame for playing his hand so poorly.Putting on my pragmatist hat again, I also think Congress could not have chosen a worse time to rein in spending.Yes, the country’s enormous debt and the entitlement programs that are driving the federal deficit needs to be brought under control....
Undoubtedly, I’ll write columns about those negotiations. But I won’t be calling anybody names.That I can promise.В (read more)
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