From AAA to AA+

[DetlefK]

Remember last time the republicans messed with the debt-ceiling?

Remember how Standard&Poor's downgraded the reliability of US-bonds from AAA (best) to AA+ (second-best)?

Remember their reasoning? That the republicans' unwillingness to increase revenue casted doubt on the long-term financial health of the US?

Now imagine a similar report coming out around October 17th, blasting the unwillingness of certain elements within the US to pay its obligations and to provide the necessary climate of economic stability.

Big Money won't be happy.
The republican establishment won't be happy.
Republicans would loose their reputation that they are the party of military&money for decades to come.

[Skidmore]

1. Big money is doing this.

It is considered a short term loss for them

[wercal]

2. S&P:

•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.
•More broadly, the downgrade reflects our view that the effectiveness,
stability, and predictability of American policymaking and political
institutions have weakened at a time of ongoing fiscal and economic
challenges to a degree more than we envisioned when we assigned a
negative outlook to the rating on April 18, 2011.
•Since then, we have changed our view of the difficulties in bridging the
gulf between the political parties over fiscal policy, which makes us
pessimistic about the capacity of Congress and the Administration to be
able to leverage their agreement this week into a broader fiscal
consolidation plan that stabilizes the government's debt dynamics any
time soon.
•The outlook on the long-term rating is negative. We could lower the
long-term rating to 'AA' within the next 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

[leftyohiolib]

3. remember when these agencies gave AAA to cdo's and when they were sued they said

hey these rating are just our opinions

[elleng]

4. Yes, the agencies are full of sh*t,

but their 'ratings' are significant vis a vis perception of general status/health of U.S. economy, which sucks more every day.