Standard & Poor’s downgrades US credit rating for the first time
The credit rating agency based in New York has downgraded the US government credit rating for the first time in its history.
Persistent rumours that had been circulating during the week were today confirmed.
Even though S&P criticised both political parties for causing this financial disorder, the Republicans are trying to ride the wave of the moment blaming President Obama for the economic fiasco.
The downgrade will almost inevitably result in higher borrowing costs.
History tells us that not every nation has been capable of recovering from such a degradation: if Australia and Canada returned to AAA after a few years, Japan’s worsening debt situation resulted in a AA- grade.
Meanwhile Washington announced that there was a clear miscalculation of nearly $2 tln which lead to the downgrade. However S&P confirmed that should the US economy continue with this trend, there could be another cut from AA+ to AA.
China holds over 25% of US public debt ($1.1 tln) and it has now every right to demand new measures to protect the value of their treasury bonds.
The editorial unit