Ummid Assistant

Hajj committee's IAS coaching cell invites applications for new batch

AMU Centre for Distance Education to add five more study centres

Welcome Guest! You are here: Home » Business & Economy

US loses AAA credit rating.. for first time in history

Saturday August 06, 2011 08:44:34 AM, Arun Kumar, IANS

Related Articles

Obama cuts a debt deal with Congress

President Barack Obama and congressional leaders have reached an eleventh hour agreement to raise the $14.3 trillion federal debt limit in two stages by as much as $2.4 trillion to avoid a catastrophic US government default. »

One in seven Americans lives on food stamps

Washington: For the first time in history, credit rating agency Standard & Poor's has downgraded America's top notch credit rating, stripping the world's largest economy of its prized AAA status.

"We have lowered our long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA,'" S&P said Friday in a stunning blow to the country, that has enjoyed the top rating for 70 years, and its political leadership.

In July, S&P, one of the three major agencies that assign grades the credit of companies and governments, placed the US rating on "CreditWatch with negative implications" as the debt ceiling debate devolved into partisan bickering.

To avoid a downgrade, S&P said the US needed to not only raise the debt ceiling, but also develop a "credible" plan to reduce the federal debt by at least $4 trillion over the next decade.

Earlier this week, Congress instead passed a plan to reduce the debt by at least $2.1 trillion.

In its report Friday, S&P ruled that the US fell short: "The downgrade reflects our opinion that the ... plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilise the government's medium-term debt dynamics."

S&P also cited dysfunctional policymaking in Washington as a factor in the downgrade. "The effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges."

The other rating agencies, Moody's and Fitch, have said they have no immediate plan to downgrade the US credit rating, giving the government more time to make progress on debt reduction.

The split verdict limits the impact of the S&P downgrade as many consequences would be set off only by a reduction by two agencies, the New York Times said.

But the lowering of the country's rating could rattle confidence and raise borrowing costs for the government and consumers, impeding the already fragile recovery, it said.

The announcement by S& P came after a week of turmoil on Wall Street not seen since the days of the financial crisis. After plunging around 5 percent Thursday, stocks bounced up and down Friday and closed relatively flat.



(Arun Kumar can be contacted at arun.kumar@ians.in)

 

 

 

Bookmark and Share

Home | Top of the Page

 

Comments

Note: By posting your comments here you agree to the terms and conditions of www.ummid.com

Comments powered by DISQUS

 

 

 

Top Stories

PMO, Delhi CM indicted for Commonwealth Games flaws

India's official auditor Friday severely indicted Prime Minister Manmohan Singh's Office and Delhi Chief Minister Sheila Dikshit's government for deep flaws and financial    »

Ready to answer any query on CAG report: Dikshit

CAG slams Dikshit, Kalmadi for 'enormous bungling'

 

  Most Read

If 'Saffron Terrorists' can get bail why not Malegaon youths: Mumbai Muslims

The Mumbai Muslims belonging to over a dozen NGOs August 04 expressed shock and anguish over the Mumbai HC verdict granting bail to the 2008 Malegaon blast  »

'HC bail to Malegaon blast accused exposes double standard'

India's banking industry hit by nationwide staff strike

Majority of banking transactions across India were hit Friday as some one million staff struck work to protest proposals to divest government stake in state-run institutions, apart from demanding a host of welfare schemes. "Nearly one million bank employees in state run, private sector   »

 

  News Pick

Ramadan and its joyous conclusion in Singapore and Malaysia

The festival of Ramadan (Ramadhan, or Bulan Puasa in Malay) is an important event in the Muslim calendar, a time of personal  »

Explosion in Iran oil pipeline

A major oil pipeline in southwestern Iran was shut down after an explosion Friday, a media report said. The cause of the blast was not immediately known. The pipeline supplies about 4,000 barrels of oil daily from Qalehnar fields to the oil facilities  »

Vocational courses being designed to improve employability: Sibal

Human Resource Development Minister Kapil Sibal Friday said the government is in the process of developing a vocational curriculum in consultation with the industry to improve the   »

Arab League headquarters in Cairo attacked

The headquarters of the Arab League - which had supported the move to impose a non-flying zone over Libya - was attacked in Cairo. Molotov cocktails were thrown at it by unidentified men, a media report said. Two men  »

 

Picture of the Day

Muslims go to Makkah al Mukarrema in Saudi Arabia for Umrah entire year other than Haj times. However, during Ramadan, number of Umrah visitors increases manifold. According to a rough estimate, over 2.5 million Muslims come from across the world to Makkah al Mukarrema for Umrah during Ramadan.

(Photo: ummid.com)

 

 
 
 
 
 

RSS  |  Contact us

 

| Quick links

News

 

Subscribe to

Ummid Assistant

 

National

Religion

RSS

Scholarships

About us

International

Culture

Twitter

Government Schemes

Feedback

Regional

History

Facebook

Education

Register

Politics

Opinion

Newsletter

Contact us

Business

Career

     

Education

       

 

 

Ummid.com: Disclaimer | Terms of Use | Advertise with us | Link Exchange

Ummid.com is part of the Awaz Multimedia & Publications providing World News, News Analysis and Feature Articles on Education, Health. Politics, Technology, Sports, Entertainment, Industry etc. The articles or the views displayed on this website are for public information and in no way describe the editorial views. The users are entitled to use this site subject to the terms and conditions mentioned.

© 2010 Awaz Multimedia & Publications. All rights reserved.