Washington’s Blog strives to provide real-time, well-researched and actionable information.  George – the head writer at Washington’s Blog – is a busy professional and a former adjunct professor.

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As I’ve been warning for years, America’s irresponsible financial policy will lead to a credit downgrade.

Today, S&P cut its U.S. outlook to negative, warning of a 1 in 3 chance of a credit downgrade in the next couple of years.

As the Wall Street Journal notes:

Standard & Poor’s Ratings Services Inc. cut its outlook on the U.S. to negative, increasing the likelihood of a potential downgrade from its triple-A rating, as the path from large budget deficits and rising government debt remains unclear.

“More than two years after the beginning of the recent crisis, U.S. policy makers have still not agreed on how to reverse recent fiscal deterioration or address longer-term fiscal pressures,” S&P credit analyst Nikola G. Swann said. He said the rating agency puts the chance of a U.S. downgrade within two years at least one-in-three.

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S&P said Monday it sees material risk that policymakers might not agree on how to address budgetary challenges by 2013, which would render the U.S. fiscal profile weaker than that of other triple-A-rated countries.

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S&P said that if an agreement isn’t reached and meaningful implementation is not begun by 2013, it would make the U.S. fiscal profile meaningfully weaker than that of other triple-A-rated sovereigns.

While the Democratic and Republican leadership point fingers at the other side, and bicker about ideological pet peeves, this is not a question of left-versus-right.

The war between liberals and conservatives is a false divide-and-conquer dog-and-pony show created by the powers that be to keep the American people divided and distracted. See this, this, this, this, this, this, this, this, this and this.

The real problem is that both Democrats and Republicans want to fund endless wars, give endless bailouts to the too big to fail banks and corporations, and perpetuate the expensive Ponzi scheme of printing money out of thin air.

Imperial wars reduce our national security. Indeed, our top military and intelligence officials say that debt is the main threat to our national security, and have said that the Pentagon must cut spending. See this and this.

Moreover, endless bailouts harm the economy. Ponzi finance costs trillions of dollars (and leads to a decrease in loans to Main Street). And see this and this.

To the extent that both the Republican and Democratic parties slavishly follow these meta-policies – which supersede the stated “conservative” and “liberal” goals – they will ensure that we lose our AAA credit, and they will destroy our economy.

Category: Credit, Taxes and Policy, Think Tank, War/Defense

“Officialdom” Downgrades US

From an institutional trading desk: S&P’s revision to the outlook on the United States’ sovereign credit rating to negative from stable this morning provoked a wide range of reactions. Not terribly significant in the sense that the outlooks on issuers’ credit ratings are revised up and down by the ratings agencies every day, and not…Read More

Category: Credit, Taxes and Policy

Passover Reading!

No, not reading about Passover — just reading the same day as Passover! • A century of inflation forecast (Vox) • Japan’s Economy Takes a Hit (The Diplomat) • Foreclosure Probe Talks Said to Yield Some Agreements With Banks (Bloomberg) • Confessions of an Inside Trader (WSJ) • Today’s WTF headline: Greenspan Steps Up Call…Read More

Category: Financial Press

Congrats to Pulitzer winners!

The Pulitzer Prizes have been announced – Congrats to Jesse Eisinger, Jake Bernstein and David Leonhardt for winning Pulitzers (all of whom have been noted here previously). Its nice to see for economic reporting: •  National Reporting: Jesse Eisinger and Jake Bernstein of ProPublica Awarded to Jesse Eisinger and Jake Bernstein of ProPublica for their…Read More

Category: Financial Press

Blog Comments

Too funny: > Hat tip Make Use

Category: Weblogs

Google Exodus: What if Moses had Facebook?

Hat tip Doug Kass

Category: Humor, Weekend

Your Federal Tax Bill Receipt

Today is the (extended) deadline to get you taxes filed — and for me to get the last of my related tax posts up for the foreseeable future. This beauty below comes to us via the Thirdway, a breakdown of where your federal tax money actually goes. Punch in the exact amount of dollars you…Read More

Category: Taxes and Policy

David Levy: Deficit Spending Is HELPING (not Hurting) the Economy

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Source:
The Deficit Is HELPING the Economy, Not Hurting It, David Levy Says

Category: Video

Frame of reference with S&P, look at UK

As a frame of reference for what S&P did on the outlook for the US sovereign debt, back on May 21st 2009 S&P put the UK’s sovereign AAA debt outlook to negative from stable. On the day before, the 10 yr Gilt yield closed at 3.58% and rose to 4.02% in the month to follow…Read More

Category: MacroNotes

Why Listen to S&P on US Debt?

There is an old Wall Street joke about analysts: “You don’t need them in a Bull Market, and you don’t want them in a Bear Market.” Which brings me to Standard & Poor’s. They put a “negative” outlook on the U.S. AAA credit rating, citing rising budget deficits and debt. To which I say “Who…Read More

Category: Bailouts, Credit, Really, really bad calls