S&P: No Regrets on Downgrade
EmailThe head of the Standard & Poor's government debt rating unit told me he "absolutely" does not have second thoughts on downgrading the U.S. to a AA+ rating despite a barrage of criticism over the weekend. And when I asked David Beers about the continued blood bath in the financial markets and if S&P is to blame he struck back.
“Well I think that’s a gross exaggeration actually. You saw that the markets were quite turbulent all through last week,” he told me.
A public spat broke out between the administration and S&P over the weekend and Tim Geithner said the ratings agency showed “really terrible judgment and they've handled themselves very poorly.”
But based on Geithner’s remarks to CNBC Beers believes the Treasury Secretary actually agrees with S&P’s analysis.
“He acknowledged the damage that was done to the U.S. reputation because of the controversy over the debt ceiling and the fact that it took to last Tuesday to get an agreement, the very day that the Treasury was warning it would have cash flow difficulties and difficulty honoring its debt,” Beers said. “He also acknowledged that the underlying public finances of the US government are on an unsustainable path.”
“So we have this paradox here where the Treasury Secretary seems to agree with the thrust of our analysis, he just rejects [our rating],” Beers told me.
Following the downgrade the administration was quick to point out S&P’s error that it miscalculated the government’s 10 year debt by $2 trillion. But Beers flat out rejected the “characterization by the Treasury about an error.”
“These are about long term projections, they are about highly technical assumptions related to Congressional Budget Office base lines about debt growth now and in the future,” he said. “So under our current projections, for example, the way we measure net public debt in the US. This year the debt is going to be about $11 trillion. We’re projecting it’s going to about $15 trillion in 2015 and we expect it to exceed $20 trillion in 2021.”
Watch the interview here:
Best Commencement Speeches of 2012 
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Obama had a Democratic Congress for the first 2 years of his Presidency.
And Congress failed to pass a budget during those 2 years.
Instead they concentrated on wrecking the nation’s health care system.
Poll after poll showed that over 80% of Americans were satisfied with the coverage that they had.
But that didnt stop their singular focus on forcing “Change and Hope” on everyone.
This is the result of their neglect of the budget and their insistence on wasting time ignoring the American people.
Posted by: Joe White | August 8, 2011, 9:13 am 9:13 am
I agree with Mr. White 100%. The constant ignormance in Washington is across both isles now like a contagious disease. They are all 100% in denial that we have to cut back entitlements and money support overseas to other countries. Congress talks the talk but can’t fulfill the walk. Their entitlements of special healthcare, gigantic pensions should be removed completely, just like regular middleclass people.
Posted by: Wanda | August 8, 2011, 10:04 am 10:04 am
is this guy from S&P for real? Of Course the Downgrade is further tanking the economy.. the fact that you have folks running that place that dont know simple addition- off by 2 trillion?!? is pathetic.. perfect example that congress is not the only inept people at the wheel during this crisis…
Posted by: sabrina | August 8, 2011, 10:09 am 10:09 am
maybe the CIA should scoop this guy up!?
punch him in the face a few times, break his nose, his arms, you know what I mean ?
Treason is what I am thinking, I would strip him of his American citizenship.
Posted by: ray | August 8, 2011, 10:33 am 10:33 am
Sabrina has a point.We could include a few more.For example,Grover Norquist would be a good one to add.
Posted by: John Patterson | August 8, 2011, 11:55 am 11:55 am
I misread the comment.Change Sabrina to Ray on my previous comment.
Posted by: John Patterson | August 8, 2011, 11:57 am 11:57 am
Ray has a great suggestion,butlet`s add Grover Norquist to the list.
Posted by: John Patterson | August 8, 2011, 11:59 am 11:59 am
As Americans I imagine that this breaks everyones heart and confidence. I would imagine that one day someone would have trotted out and said “we are facing the worst crisis we have ever faced so we must do ??? or something similar to what was told to us the last election.
And then of course both parties would have trotted out and would say ” I tried to get this done or that done but this side said this or that side said that”.
As bad as the S&P sucked with the housing crisis someone there might be doing us a big favor and force us to get our house in order.
I do not wish this mess on any side, on any leader, and we as Americans really need to clam up and support each other the country and pray that the President gets his act together.
Posted by: david | August 8, 2011, 12:02 pm 12:02 pm
So now we have
“The Boehner/Tea Party Downgrade”
after
” The Healthcare Availabilty Bill” after
” The Obama Stimulus Bill” after
” The Bush/Paulson Bank Bailout” after
“The Bush/Banking Mortgage Meltdown” after
“The Bush Katrina Debacle” after
“The Bush Housing bubble economy” after
“The Bush Wealthy Tax Cut” after
“The Bush/Cheney Iraq War” after
“The Bush Ben Laden Capture Failure” after
“The Bush “what happened” 9/11 response and after
” The Bush Missed 9/11 Warning” after
” The Clinton Prosperity Decade”
Red-shirt Republicans we see your results and we say
“You are Unfit to Govern!!!”
Posted by: Cliff Roe | August 8, 2011, 2:16 pm 2:16 pm
I’m sorry people credit ratings and scores and all that crap is exactly what it is crap. I have had hard times like a lot of other Americans and I have worked hard to pick myself back up but my credit rating didn’t come up with me, but you know what having a low credit rating has yet to stop me from getting anything that I want now that I have a stable job. The same will work for the government screw a damn credit rating once the economy is stable that damn credit rating isn’t going to stop our country from achieving. That’s my 2cents on it has a middle class American.
Posted by: Chrissie | August 8, 2011, 2:21 pm 2:21 pm
Does the American public realize that in 2011, today, 10% of the US Population control all congressional action on any issue?(Senators from 30 states, which contain only 10% of our nation, are needed to provide 60 votes in the Senate and bring any legislation to the floor of the Senate)
In any other democracy where a minority permanently control the destiny and well-being of the other 90% it would be called a dictatorship and eventually people would take to the streets.
Posted by: Cliff Roe | August 8, 2011, 2:24 pm 2:24 pm
Cliff I would have to totally agree with you on both of your post I’ve read. That list of events from when we were prosperous under Clinton to what Bush and the red party took us through is right spot on.
Posted by: Chrissie | August 8, 2011, 2:29 pm 2:29 pm
Investerslisten SELL OFF STOCK IN S&P NOW!!!!!!!! How can you invest in a company that just lost you 5.5 percent with a move that is sure to tank the economy. If you invest in S&P you deserve to lose your money.
Posted by: mike | August 8, 2011, 2:32 pm 2:32 pm
Makes you wonder how much the Koch Brothers are involved in this mess.
Posted by: rgcook2003 | August 8, 2011, 3:22 pm 3:22 pm
When will people realize that every time the Republicans get any amount of control, everything goes to hell in a handbasket!?
Posted by: Cynthia Williams | August 8, 2011, 4:07 pm 4:07 pm
The Republicans are not interested in saving the country. They want Obama out of the white house so bad that they can taste it. I wouldn’t be surprised to learn that this “downgrade” in our credit rating is a conspiracy with the republicans to blame Obama. If not, the repubs and the tea party holding the country hostage for weeks on end, certainly more than helped to create this disaster.
Posted by: bayley0402 | August 8, 2011, 4:08 pm 4:08 pm
Have you noticed that the S&P bean counters when asked about their failures in the mortgage, AIG etc companies that caused the financial meltdown their standard answered is, to paraphrase,….That wasn’t my S&P that was the other S&P down the hall.
Posted by: Rick | August 8, 2011, 4:29 pm 4:29 pm
Of course S&P has no regrets – the credit downgrade was MEANT to depress the markets and allow S&P and its executives to reap massive profits from SHORT SALES. Investigation, anybody??
Posted by: Juliannas_Uncle | August 8, 2011, 5:14 pm 5:14 pm
Now let me see if I understand this – raising revenues through taxes would be a bad thing for the economy because it would take money out of the the private sector. So instead, the US credit rating is downgraded and the stock markets respond by losing 13.5% (over ten days)- approximately equal to $1.9 trillion. Uhm, I suspect most of us investors would rather have paid some more taxes. How does the tea taste now?
Posted by: leggogarn | August 8, 2011, 5:46 pm 5:46 pm
Tell the good ole S&P to kiss my patootie!Leave my country and my president alone!!!
Posted by: Tamara | August 8, 2011, 6:56 pm 6:56 pm
A suggestion……
A committee be formed which excludes the fringes of each party (Communists, Socialists and Minority representative parts of the Left, and Christian Coalition and Tea Party and War Machine parts of the Right)…
and give the remainder 6 months to bring forth the policies and legislation to solve our issues(grow the economy and fix the deficits) This committee would be probably consist of approx. 50 Senators and 200 Congressman. Exclude all consultants and lobbyists from any part of the legislation.
The rest of the Senators/Congressmen can go home for the 6 months and play golf with their ministers, their lobbyists and their like-minded minorities.
There is a time when all points of view have a say, but there are times, like now, when only the majority of he public should be served….and what do you know… generally speaking when the majority is served well, the minorities are also taken care of…
Posted by: Cliff Roe | August 8, 2011, 7:21 pm 7:21 pm
I am so outraged at the Administration’s blame game! EVERYTHING THAT HAS HAPPENED IS A DIRECT RESULT OF LIBERAL DEMOCRATS FISCAL POLICIES, INCLUDING THE WRECKING-BALL PRESIDENT!
Axlerod’s comment blaming the Tea Party is a bloody lie, and your network lets him get away with it without a Conservative response!!
George, are you just another Liberal Hack, I sincerely hope not!
Posted by: Tim | August 8, 2011, 9:02 pm 9:02 pm
I think all of the political power struggle need to stop. We appointed our congressmen,congresswomen, and the senators to fight for us, fix our damaged economy, but not to go to Washington and see who can do the work better. We put our president down so much, no wonder the other countries put American down. In my 34 years in America, I have never see too much of power struggle. Why will the congress and the senator have to wait till the last day to reach some type of compromise knowing that they will go foe break. It make no sense to me. No wonder, all these small people like standard and Poor could put us down Anyway the people in Washington didn’t loose their retirement in all of these mess they put an average Americans thorough. I say let fire all of our representatives and hire all those poor grandmas to go to Washington and help with our budget and the economy.
Posted by: Ronke Asuquo | August 8, 2011, 9:19 pm 9:19 pm
Obama has failed. He has ruined the Democratic party is ruining the country. He is unfit for the Presidency, he’s not a leader, not that intelligent and most certainly not politically skilled enough to be President. Geitner has also failed and should be fired immediately. The Dems were very foolish to betray the brilliant leader Hillary Clinton for Obama. Obama cannot win in 2012. The only honorable thing for Obama to do now is step aside as LBJ did in 1968 for for the good of the party and the country and endorse Hillary Clinton for President in 2012.
Posted by: KJ | August 9, 2011, 12:43 am 12:43 am
Obama has NOT failed as a leader. He inherited a big mess from Bush. The Republicans take their orders from Rush Limbaugh. Rush wants to see Obama fail and Sen McConnell said he wants to make sure Obama is a one term president. This is very sad. The Republicans will distroy the entire country just to make Obama look bad. But, there is someone looking out for Obama and our country. Thas is Jesus Christ our Savior. All the stumbling blocks that the Republicans place in Obama’s way will revert right back to them. If the Republicans take over the senate and white house the rich will get richer and all the rest of us will be poor. That’s no way to run a country.
Posted by: Sisterquilter | August 9, 2011, 3:12 am 3:12 am
lets see the out come on certain curriculum revolvement and notice previal looks into the candidate.publicicides judicial into immoral standards./tresureary/
Posted by: charles williamson | August 9, 2011, 12:51 pm 12:51 pm
Sisterquilter wrote:
“the rich will get richer and all the rest of us will be poor. That’s no way to run a country.”
And that makes my point beautifully.
Socialists like Obama and his supporters want to be able to decide how much money someone can or cannot make and how they can spend it.
My income is ‘below the line’ most years, so I’m definitely not rich.
But I don’t want the government telling businesses how much to pay this person and that person.
Government should fulfill it’s constitutional duties and leave everything else alone.
Liberals want to twist the Constitution to tell everybody how much they can earn and what they have to buy with their money.
The Obamacare mandate that requires everyone to become a customer of the health insurance companies is unconstitutional.
But liberals don’t care. To them, it means more control over you. And that’s what they want.
Posted by: Joe White | August 16, 2011, 9:54 am 9:54 am
Sisterquilter wrote:
“But, there is someone looking out for Obama and our country. Thas is Jesus Christ our Savior. …If the Republicans take over the senate and white house the rich will get richer and all the rest of us will be poor. That’s no way to run a country.”
And covetousness is not the way to honor Jesus Christ our Savior.
Why don’t you concentrate on EARNING more if you want more, and stop worrying about how much someone else has?
Envy and covetousness are bad things individually, and they are not a good way to run a country.
Don’t try to use the name of Christ to justify your covetousness.
Posted by: Joe White | August 16, 2011, 10:06 am 10:06 am