Fitch may cut U.S. to "restricted default" in August

[mahatmakanejeeves]

Source: Reuters

(Reuters) - The United States probably wouldn't be able to maintain its prized AAA sovereign ratings status if it suffered even a "technical" default on its debt, Fitch Ratings said on Wednesday.

The rating agency also warned it would downgrade the U.S. sovereign ratings to "restricted default" in August if the government fails to honor Treasury notes and some coupon payments on Treasury securities due on August 15.

"Even a so-called 'technical default' would suggest a crisis of 'governance' from a sovereign credit and rating perspective and though such an event (such as a short-lived Treasury bill default) may not permanently impair the capacity of the U.S. government to service its obligations, it is unlikely that its 'AAA' status would be retained in the short to medium term," Fitch said in a statement.

Fitch added, however, that it believes U.S. lawmakers will ultimately reach an agreement to raise the country's debt ceiling and avoid any default.

Read more: http://www.reuters.com/article/2011/06/08/us-usa-ratings-fitch-idUSTRE7573IM20110608?feedType=RSS&feedName=topNews

---

It's a dream come true: the US government will be drowned in a bathtub.

Whose fingerprints will be found?

[Pale Blue Dot]

1. Whose fingerprints will be found?

It's like The Murder on the Orient Express (SPOILER ALERT!): Everyone played a role in this disaster. You've got the Republican's deliberate sabotage, Democrat's willful ignorance, the American public's selfish complacency, and 30 years of continuously short-sighted and counter-productive economic policy.

[BREMPRO]

8. well said.. that sums it up perfectly!.. we're screwed..

[doc03]

2. Maybe it would be a good thing to just cut SS right now and

pin it on the Republicans. The Republicans would get voted out of office and never be back for decades.

[swag]

3. I guess Republicans think we don't pay high enough interest on our debt

[BREMPRO]

4. we are looking more an more like a failed state.. with the rest of the world's gov't

having to lecture us (ie the republican idiots) on the importance of raising the debt ceiling.

pukes are playing w fire cuz they know they can win.. if the economy collapses.. they win.. if they get their spending cut concessions they win... How will the dems win? do they even have a strategy? i haven't heard a peep..

[Iliyah]

5. I beg to differ

if the economy collapses, the party known as the gop will fall apart. Mind you, the super rich may also default as well AND rocks and metal are a dangerous thing because it varies in cost and weight.

If history repeats itself, I may meet the Kochs' twins in the soup line if they are strong enough to survive losing their wealth. From what I read, and yes this is the correct history not the made up one that Texas and other states who are trying to institute their untruthful version of history, there were ALOT of suicides.

Us commoners will not be able to pay the sky high rates that the banks and other institutions will try to put on us (I know it high as hell now) but when default hits, it going to be even higher. People who are struggling now won't survive in making the payments and therefore, MAJOR DEPRESSION.

This shit falls directly on the GOPERS aka tea brats.

[FakeBritishGuy]

6. Nope.

I'm afraid that the Koch twins belong to a club that you and I aren't in.

When shit does hit the fan (though more likely to simply circle the toilet bowl), they will still legally own the company that makes the toilet paper (literally) and have relationships with those who have the legal power to call in the National Guard.

Our political system will not change. The Republican party already survived one major depression and there are enough retarded people in this country that our two party system will continue it's corrupting game of short sighted brinkmanship.

We as a people really need to take a lesson from the Germans...just not Fritzl.

[BREMPRO]

7. fantasy world.. the party in power gets the blame- GOP n the media will blame it on Obama

and the Dem's for not being fiscally responsible by agreeing to austerity spending cuts (laughable irony given the GOP's abysmal fiscal record) n it will stick.. the rich will never be in a soup line for christ sakes... they own the soup factory.. just means less soup for us.

[doc03]

9. I disagree the President needs to use his bully pulpit and tell it

like it is instead of trying to compromise with the Republicans. They aren't going to compromise and they are going to force the issue and blame the Democrats for the results. He needs to get out there every day and say if they don't raise the debt ceiling we will be forced to cut SS and Medicare on current retirees or else default and go into another great depression. If he doesn't do that the Democrats will get the blame, that's what the Republicans are counting on. There seems to be no issue that he will take a stand on and draw line in the sand and they know it.

[AndyTiedye]

11. The "Bully Pulpit" is the Tee Vee, and the Republicans OWN It

"I paid for this microphone", R. Reagan

[freshwest]

13. Exactly. We haven't seen one percent of what he's said, just GOP spin.

[doc03]

22. Has he even once ever taken a stand on anything?

You can't claim the Republicans control the TV when you don't even attempt to put up a fight. Day after day I see one Republican after another spewing their BS on the deficit. You get a Democrat on TV and he is talking about coming to some kind of compromise with the Republicans. Bullies don't compromise, it's either their way or else.

[AndyTiedye]

23. Dems Who Put Up a Fight Don't Get On TV. They Prefer Blue Dogs (Boll Weevils) Instead

[AndyTiedye]

10. The Koch Brothers are Probably Betting that We WILL Default

They will make a killing when it happens.

[No Elephants]

20. They're probably calling the shots.

[JackRiddler]

12. This is for not shutting down the bankster shakedown operations known as "ratings agencies" back...

after their titanic frauds on the world were exposed in 2007-2008.

[No Elephants]

21. +1 Great ratings for those crap mortgage derivatives and no one even whispered "prosecution" or

"consequences."

[TomCADem]

14. Fresh Downgrade Threat to U.S. Debt

Source: Wall Street Journal

A third rating agency threatened to downgrade the U.S. government's credit status if Congress failed to increase the nation's borrowing limit by early August, increasing pressure on lawmakers and the Obama administration to reach a deficit-reduction deal.

* * *

But Democrats and Republicans remain far apart on how to reach a deal. Democrats have rejected cuts to entitlement programs, such as Medicare, and Republicans have said no to tax increases.

Democrats see discussion of scaling back oil and gas tax breaks as the "first attempt to storm the beachhead on the larger revenue issue," an official familiar with the talks said. "It has a lot of weight simply beyond the $4 billion it would raise, being able to say to Democrats on the Hill that we got these guys to go along with one of our long-sought priorities."

Failure to raise the debt ceiling in time to avoid default would imply a crisis of governance, Fitch sovereign-ratings head David Riley said, although Fitch and Moody's said they expected the U.S. to raise the limit before triggering a default.

Read more: http://online.wsj.com/article/SB10001424052702304778304576373992711772366.html

---

Tax cuts to the rich and oil companies versus keeping Medicare from turning into a voucher plan. That is the question with Republican presidential candidates doubling down and demanding even more tax cuts, which would also require even deeper cuts in entitlement programs than the ones Republicans in Congress are currently proposing. Since when did everyone become Rand Paul?

I know some are predicting that the Republicans will prevail and the Republican voucher plan will become a reality. However, I do believe that there are enough of us who will ignore the corporate media's siren call to Blame Democrats, Give Republicans A Free Pass, Then Rinse and Repeat.

[Old and In the Way]

15. It's legislative treason.

The Republicans are all in for taking down this country economically. Half the voters understand this. The problem is getting the other half to wake up.

[still_one]

16. Standard and Poors, moodys, and fitch should have been put out of business when they misled the

public before the meltdown

That they are doing this shows exactly where they stand, with the republicans

The truth is compared to everyone else the U.S. debt is still AAA

[fasttense]

17. We wouldn't be in this pickle if RepubliCONS had been prosecuted for their

many, many, many crimes they have committed.

Because they think Obama and the Democrats are a bunch of wimps and will cave on everything and anything, they are pushing this to the limit.

You can not fight a bully by letting him beat you up.

[no_hypocrisy]

18. Republicans want it all.

A minority within 1/3 of government wants cuts in spending, cuts in Medicare/Medicaid, and no tax increases.

Used to be where the worse you could expect was partison trade-offs where republicans would get no tax increases in exchange for democrats not getting spending cuts. Yeah, you get inertia and status quo, but you also get the illusion of political compromise.

[No Elephants]

19. Starve the beast. Or at least make it look starved.

Oh, look, a Twitter of Weiner's underwear!