S&P Gives US A Warning Shot

2011-04-25T18:51:00.000-07:00

Standard & Poor's, a credit rating agency, recently gave the US a discouraging sign. It labelled the US as having a "negative" outlook. This was the first time in over 70 years that the country has been bestowed such a welcoming gesture. Now, this is merely an outlook. S&P's did not actually downgrade the country's credit rating. The AAA (highest achievable rating) that the US has been awarded still remains in tact.

So, does this outlook mean anything? Does this assessment illuminate an inevitable downgrade? Or, is this US going to bounce back and prove the doubters wrong? That remains unseen. The US' economy is still struggling mainly with unemployment. With unemployment failing to decrease, the government is forced to borrow more and carve deeper into the deficit. I do think that the economy will bounce back at some point. Tightening the budget should be done. Moving the focus away from the elderly and things like daycare for children, while zeroing in on taxes and corporations should help.

http://www.economist.com/node/18586668

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S&P Gives US A Warning Shot