Bloomberg is reporting that the U.S. faces losing its top-level debt rating as officials struggle to raise the $14.3 trillion borrowing limit. Investors are warning that a cut is likely as President Barack Obama and House Speaker John Boehner argue over how to increase the debt ceiling while also trying to curb borrowing. The government needs to boost the cap by Aug. 2 so it can keep paying its bills, according to the Treasury Department.
Moody’s Investors Service, Standard & Poor's and Fitch Ratings have said that they may cut the nation's top-level sovereign ranking if officials fail to resolve the stalemate. The ratings may be reduced because politicians probably won't agree on a plan to trim spending, said Kathleen Gaffney, co-manager of the $21 billion Loomis Sayles Bond Fund.
All of this because elected officials could not come to an agreement on raising the debt ceiling, even when they knew it would have to be done? It was raised eight times under former President Bush, but now it's a problem? Political posturing has resulted in an embarrassment for the nation and helped make ratings agencies gun-shy about maintaining the country's top credit rating.
Gee, thanks for the stalemate. Instead of demonstrating how tough the Tea Party and John Boehner are, the stalemate only revealed just how shortsighted they are, again. This is what happens when ideology trumps ideas and when those obsessed with 2012 fail to deal with 2011.
Read more at Bloomberg.
In other news: Boehner's Big Bust: GOP to Revise Unworkable Plan.