US Credit Rating Imperilled Again – Barnaby Was Right

25 Nov

From Bloomberg BusinessWeek:

Reducing the $1.2 trillion of discretionary spending cuts set to begin in 2013 may have “negative rating implications” for the U.S.’s top credit ranking, according to Moody’s Investors Service.

The deficit reductions are to take place over 10 years and were triggered by a congressional panel’s failure this week to agree on alternative cuts of the same amount. Moody’s, which didn’t change the U.S.’s Aaa rating after the committee failed to reach agreement on Nov. 20, has a “negative outlook” on the country’s debt.

“If they were to eliminate that process or reduce that amount significantly, that would definitely be a negative for our thinking about the rating,” Steven Hess, senior credit officer at Moody’s, said today in an interview. “A change in that would increase deficits and therefore the debt over time and would definitely be negative.”

2 Responses to “US Credit Rating Imperilled Again – Barnaby Was Right”

  1. Tomorrow's Serf November 25, 2011 at 10:17 am #


  2. Twodogs November 25, 2011 at 6:17 pm #

    Increased debt = negative? Double duh!

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