S&P Downgrades Nation's Triple-A Rating
Agency delivers historic setback to U.S.
By John Johnson, Newser Staff
Posted Aug 5, 2011 6:01 PM CDT
Updated Aug 5, 2011 7:18 PM CDT
A trader works on the floor of the New York Stock Exchange on Friday.   (AP Photo/Jin Lee)

(Newser) – Goodbye AAA, hello AA+. In a rough milestone, S&P has downgraded the nation's Triple-A rating for the first time, reports the Wall Street Journal. The move came even though the Treasury Department pointed out a $2 trillion math error in the agency's debt projections that delayed but did not change the official decision, notes the New York Times. "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," the agency says in a statement. (Full text here.)

Business Insider's take before the news hit: "The popular thinking on this is that its impact on markets would be less significant than the political impact to Obama. That being said, never before has the world's safest sovereign been downgraded, so who knows what would happen." The immediate impact will be clearer Sunday night when the Asian markets open, says the Washington Post. Meanwhile, Talking Points Memo notes that the political blame game already has started. The other two big agencies, Moody's and Fitch, previously reaffirmed the AAA rating.

More From Newser
My Take on This Story
To report an error on this story,
notify our editors.
Your Take
11% of people agree
that it's Scary
Check Out Another Scary Story
You Might Like
Showing 3 of 192 comments
Aug 8, 2011 9:43 AM CDT
"The move came even though the Treasury Department pointed out a $2 trillion math error in the agency's debt projections..." That's just bullshit, Mr. John Johnson of Newser. The S&P figures were based on an annual 5% growth rate, which is standard, the Treasury Department assumed a 2.5% growth rate. That's not a math error, moron, it's a difference of opinion. Fuckin' NewserSpin - what a crock of shit.
Aug 7, 2011 9:48 PM CDT
What did everyone expect? Keep our AAA rating with S&P when we just keep borrowing and spending money? Ron Paul for President in 2012.
Aug 6, 2011 4:37 PM CDT
Funny. This is the same S&P that was giving AAA guarantees to their buddies at Enron and to the mortgage backed securities that triggered the banking/liquidity meltdown of 2008, which necessitated the trillion dollar bailout of the rich geniuses on Wall Street, and also made necessary the "deep cuts" in the federal budget. This one is a nice manufactured media "crisis" if there ever was one. Politicians should be able to get a lot of mileage out of it and continue with Divide&Conquer all the way to election and beyond, to their golden retirement. Meanwhile ... in the real world, no one actually gives a crap.