Quote:
Originally Posted by Cowboy89
No, S&P made it very clear in their press releases that a $4 Trillion funding gap over 10 years needed to be closed to maintain their AAA rating. Meaning that all forms of proposed bills from the Democrats were offside of this too. Even if the same deal was struck mid-July there would be a downgrade none the less.
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Right, but let's not forget the numbers:
- The debt ceiling negotiations result in a 2+ trillion dollar reduction in spending.
- S&P says their calculations say that it needs to be 4 trillion to keep triple A.
- It comes to light S&P made a 2 trillion dollar mathematical error (overestimate) with regard to their baseline projections
Sure looks to me like S&P wanted ~2 trillion in cuts (when you take out the 2 trillion math error) and they got it.
I'm personally of the opinion that this doesn't matter at all for the US. But S&P sure isn't doing itself any favours in trying to overcome that tag of incompetence they got when they were rating everything from investment houses as triple A in exchange for fees.