Aug 06, 2011 (LBO) – The long term credit rating of the United States of America has been downgraded by one notch to AA + with a negative outlook by Standard & Poors, a rating agency. Unless rulers cut spending as agreed with the congress, the rating agency said it may further downgrade US government credit.
“The outlook on the long-term rating is negative,” S & P said. “We could lower the long-term rating to ‘AA’ within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.”
The full S & P statement is reproduced below:
United States of America Long-Term Rating Lowered To ‘AA+’ Due To Political Risks, Rising Debt Burden; Outlook Negative
â€¢ We have lowered our long-term sovereign credit rating on the United States of America to ‘AA+’ from ‘AAA’ and affirmed the ‘A-1+’ short-term rating.
â€¢ We have also removed both the short- and long-term ratings from CreditWatch negative.
â€¢ The downgrade reflects our opinion that the fiscal consolidation plan that Cong