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Tuesday, August 09, 2011

S&P Joins In On Scaremongering Brinksmanship They Decry

Downgrading the U.S. credit rating and offering their reasons is one thing. But now the S&P is engaging in "IF" ultimatums and remedies the U.S. must take otherwise face a further downgrade? I think this is dangerous talk economically speaking, even if they are carrying water for republicans.

Politico Excerpt:
If the fiscal position of the United States deteriorates further, or if the political gridlock becomes more entrenched, then that could lead to a downgrade," John Chambers said on ABC's "This Week."

These republican-like scaremongering tactics add much credence to the mounting evidence that the downgrade was a conscious political strategy by the agency to damage Obama in exchange for political favors.

What is interesting though in S&P's downgrade report is they believe that because Republicans pledged to never raise tax revenue, the Bush tax cuts will likely NOT expire at the end of 2012 but instead be renewed. This is the key explanation to their long-term outlook remaining negative. No revenue.

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