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Explain me what is this about Standard & Poor degrading US?

7 Aug

The news channels and the news papers have only one news to highlight off late – Standard and Poor (S&P) has degraded US to AA+ from AAA. So what is this about?

I asked Baba Google Dev to throw some light into what this actually means? And as usual, there was a lot of information served immediately infront of me. Here are few of the links which makes the importance of the rate cut clearer. And, in a language that I understand.

The full report by Standard and Poor on the rating downgrade is available at their website. Have a look.The Overview part of the report explains the decision.

"The downgrade reflects our opinion that the fiscal consolidation plan
that Congress and the Administration recently agreed to falls short of
what, in our view, would be necessary to stabilize the government's
medium-term debt dynamics."

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