By Ken Feltman
On Friday, Standard and Poor’s downgraded the U.S. government’s triple-A credit rating. On Saturday, S&P threatened another downgrade.
In fact, considering the way S&P gives advance notice before downgrading, if the U.S. fails to make the cuts outlined in the debt ceiling agreement, another downgrade is likely.
Less than 24 hours after slashing the U.S. rating, S&P Managing Director John Chambers told reporters on a conference call that the moribund economy and the inability of the political system to deal with the debt crisis could lead to another slash in America’s rating.
“Compared to some other highly rated governments, the U.S. government does not have the proactive ability to put public finances on a firm footing,” Chambers said.
His colleague David Beers said the partisan bickering increases the risk that Washington will not achieve effective policy remedies. “For that reason, there’s a lot of uncertainty about the future debt burden,” Beers said.