S&P Says U.S. Was Minutes From Falling Below Detroit In Bond Rating
Leah McGrath Goodman from Newsweek wrote a great piece about how the federal government’s rating on S&P would plummet.
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 fear 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, which was 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 was ready to cut the debt rating again.