Standard & Poor, A Financial Entity With Little Credibility, Adds to GOP/Tea Party Efforts to Bring Down U.S. Economy

Wall Street tumbled at today’s opening bell amid a rout in global stocks after Standard & Poor’s downgraded the U.S. credit rating for the first time.

The question is why this discredited financial entity, which is a great contributor to the financial mess we are in, is again adding fuel to the fire with their outrageous rating downgrade.

In addition, House Speaker John Boehner, Senate Minority Leader Mitch McConnell, the entire GOP and those extremist and ignorant Tea Party fools should been held responsible as you watch your 401K’s lose value and your credit card interest rates go through the roof.

Former Clinton Labor Secretary and current Professor of Public Policy at the University of California at Berkeley Robert Reich said, “Standard & Poor’s downgrade of America’s debt couldn’t come at a worse time. The result is likely to be higher borrowing costs for the government at all levels, and higher interest on your variable-rate mortgage, your auto loan, your credit card loans, and every other penny you borrow.”

S&P’s Ratings Services today also downgraded the credit ratings of mortgage lenders Fannie Mae and Freddie Mac.

Just a ½% increase on a $200,000 30-year fixed home loan would mean paying $743 more a month.

Reich further states, “S&P’s intrusion into American politics is also ironic because, as I pointed out recently, much of our current debt is directly or indirectly due to S&P’s failures (along with the failures of the two other major credit-rating agencies — Fitch and Moody’s) to do their jobs before the financial meltdown. Until the eve of the collapse S&P gave triple-A ratings to some of the Street’s riskiest packages of mortgage-backed securities and collateralized debt obligations.”

New York Times columnist and Nobel Prize-winning economist Paul Krugman also blasts S&P, “Let’s start with S&P’s lack of credibility. If there’s a single word that best describes the rating agency’s decision to downgrade America, it’s chutzpah — traditionally defined by the example of the young man who kills his parents, then pleads for mercy because he’s an orphan.”

Krugman adds, “America’s large budget deficit is, after all, primarily the result of the economic slump that followed the 2008 financial crisis. And S&P, along with its sister rating agencies, played a major role in causing that crisis, by giving AAA ratings to mortgage-backed assets that have since turned into toxic waste.

Nor did the bad judgment stop there. Notoriously, S.& P. gave Lehman Brothers, whose collapse triggered a global panic, an A rating right up to the month of its demise. And how did the rating agency react after this A-rated firm went bankrupt? By issuing a report denying that it had done anything wrong.”

Also chiming in is US Treasury Secretary Timothy Geithner who attacked Standard & Poor’s ‘terrible judgment’ in downgrading US debt from its triple-A rating.

While Krugman states, “there is no reason to take Friday’s downgrade of America seriously. These are the last people whose judgment we should trust.”

The most crucial thing he says is, “The real question facing America, even in purely fiscal terms, isn’t whether we’ll trim a trillion here or a trillion there from deficits. It is whether the extremists now blocking any kind of responsible policy can be defeated and marginalized.”