S&P: US Was Minutes From Earning Lowest Credit Rating

Now, let’s not all get our underoos in a knot – after all, those erudite economist genius Tea Party congresscritters assure us that this would be no big deal:

The Republicans caved and agreed to restore the government and extend the debt ceiling for a number of good reasons. The Democrats and the president held firm, voters were angry with them, and Wall Street was worried that if America defaulted on its debt the world economy would collapse, as it did in 2008.

But there was no stronger pressure on GOP House members to buckle than the knowledge that independent credit agencies like Standard & Poor’s and Fitch were poised to downgrade America’s credit score.

Key to making such decisions is John Chambers, the global head of S&P’s sovereign ratings committee and a member of the team, led by colleague Nikola Swann, that marked down America’s debt rating in 2011, from AAA to AA+. This time, if the House Republicans had not blinked, Chambers noted that S&P would have been forced to cut the debt rating again.

“If the government does discontinue debt-servicing, unless it is cured immediately, it goes into ‘selective default’,”said Chambers, citing S&P sources close to the heated talks in Washington. “Selective default” is the lowest of S&P’s 20 grades of untrustworthiness. How many countries are currently in selective default? Only Grenada.

By: dave-dr-gonzo

David Hirsch, a.k.a. Dave "Doctor" Gonzo*, is a renegade record producer, video producer, writer, reformed corporate shill, and still-registered lobbyist for non-one-percenter performing artists and musicians. He lives in a heavily fortified compound in one of Manhattan's less trendy neighborhoods.

* Hirsch is the third person to use the pseudonym, a not-so-veiled tribute to journalist and author Hunter S. Thompson, with the permission of his predecessors Gene Gaudette of American Politics Journal (currently webmaster and chief bottlewasher at Liberaland) and Stephen Meese at Smashmouth Politics.