Another Downgrade For US Credit Rating Predicted At State Department Briefing

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The campaign is over. Now it’s back to reality. A very grim reality.

(CNSNews.com) – An economic analyst invited by the State Department to brief a group of foreign journalists on the U.S. economy on Election Day responded to a question from a reporter from the Egyptian newspaper Al Wafd by predicting that U.S. Treasury securities—the means by which the U.S. government finances its debt–will be downgraded again.

On Aug. 5, 2011, three days after President Obama signed legislation increasing the U.S. government debt limit by $2.4 trillion, Standard & Poors downgraded U.S. Treasury securities from its highest grade of AAA to AA+. Prior to that, U.S. government debt had always maintained the highest rating.

At Tuesday’s State Department event, the Egyptian reporter asked analyst Kathy Bostjancic, director of Macroeconomic Analysis for the nonpartisan Conference Board, what impact the so-called “fiscal cliff” facing the U.S. federal government would have on the rating of U.S. Treasury securities.

“I mean, to me, it seems the odds of us getting downgraded again are very high,” said Bostjanic.

“But I think that they [Republicans and Democrats] get around the sequestration,” Bostjanic went on to say, “and I think by consequence, because they’re not going to find an agreement on how to offset that in the budget, we’re going to get downgraded.”

Remember that President Obama said during the last presidential debate, rather bluntly, that the sequestration spending cuts weren’t going to happen. If that’s true we will almost certainly get another downgrade in our credit rating, which isn’t merely symbolism.

When our credit gets downgraded the cost of our borrowing goes up. Think of it like getting a loan or a credit card. The worse your credit rating the higher your interest rate. Every time our credit rating gets downgraded our government has to pay more to borrow.

In fiscal year 2012 alone the US spent over $359 billion on interest payments to service the national debt, an amount roughly half our defense budget and more than half of all discretionary spending combined.

A downgraded credit rating means accelerated interest costs. That’s more of our tax dollars spent on nothing other than servicing our gigantic debt pile. And with Obama’s re-election, there are no solutions on the horizon.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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  • Angie Faut

    So when does reality start to sink in to the blind?

    • banjo kid

      It is hard to say ,it might be when their flow of money stops or they are denied any food stamps who know s when the key will be turned that unlocks the apparent truth . It could be when no one has a job and they are looking to a government that has no money . Or maybe when over half of their check goes to uncle SAM and they get to keep a third of what is left

    • $16179444

      either it won’t until it personally affects them or nothing will. sadly the latter seems to be the way it will go – the “I got mine” mentality rules the day.

  • Gern Blanston

    So raise taxes on the rich – that’ll get us almost 100 Billion… won’t that solve our fiscal problems?

    • $8194357

      but if the Democrats just had “all” the oil income…
      Utopia achieved, right.

      • banjo kid

        Lesson unlearned this election for sure .

  • WOOF

    “Reagan,” Vice President Dick Cheney
    famously declared in 2002,
    “proved
    deficits don’t matter.”
    Republican debt ceiling approvals.

    • Retire Now Conrad

      Did you read the quote? He was saying they don’t matter in elections. He wasn’t saying they don’t matter.
      This election proved it again. $1 trillion or more in excess spending didn’t deter you from voting for Obummer.

      • WOOF

        Deadeye Dick was saying the 500 Billion “was our due” in other words an entitlement. We won and we’re raiding the Treasury. http://www.ontheissues.org/2004/Dick_Cheney_Budget_+_Economy.htm

        • Retire Now Conrad

          I admit it. I missed the was our due part of the quote.
          Your comment concerns me because you seem to think bad behavior is justified if you can prove someone else on the other side did it too.
          Bad behavior does not justify bad behavior.
          I will bet 95% of the people on this blog (including me) who are scared of the exploding debt were concerned about it when Bush was president.
          You are good at research, research the fall of the Romans. We are following their steps.

  • geoff

    Amazing that these stories don’t come out prior to election day. Not that they would be reported anyway

    • $8194357

      Think Bengazi and the coming cover up…
      It will soon be white washed by the media and no worries mate..
      Smooth sailing just like Fast and Furious..
      Can I say “white washed” in Barry’s second term?

      • NDSuperman

        racist

        • $8194357

          ya…
          I’m getting used to that…
          Truth seems to be taken as the new hate speech huh..

    • Someone

      No, this was reported prior to election day. It was on Yahoo News at least two months ago.

  • Harold

    I think all thats needed is printing of more money by the Fed. Just keep printing money and everyone will be happy. Also need to take away all the money from the rich.

    • $8194357

      We can’t be broke..
      We still have paper to print on…
      sheesh…Leftist never learn other than how to
      repeat the lies..

      • banjo kid

        over drawn nah can’t be I still some checks left in the check book.

    • banjo kid

      Maybe we could all have a printing press and some paper donated by the fed and we can all live likes Kings and Queens

  • chris

    If we follow the Simpson-Bowles plan, we could probably avoid the fiscal cliff and avoid the downgrade. This all depends on how much the Republicans are willing to cooperate with the president to increase revenue and cut spending.

    • $8194357

      Its all on the republicans shoulders huh..
      Follow Barry off the cliff like good socialist lemmings or else…
      For a smart person you sure are dumb…

      • sbark

        …………..for a ideological person, he sure is ideological

        • $8194357

          Its all about science and progressivism…
          The ideological force is strong with this one.
          Social engineering a better planet is facist is it not?

  • $16179444

    why worry? gay marriage and free contraception for all! we are saved!

    • $8194357

      And in two states you can buy an ounce and get stoned..

      • banjo kid

        Yah! ( humor)

        • $8194357

          Choom choom…

  • $8194357

    Soros last month dumped his American finacial interests he aquired after the housing bubble burst and the taxpayer bail outs made him a ton of dough …
    Whats that tell folks?
    Soros is divesting American banking assets why?

  • WOOF

    Will the House Republicans stamp their feet, get red in the face, demand food stamp, Soc Sec, and medicare benefits be reduced before raising the debt ceiling ?
    That’s how the US credit rating was downgraded before.
    Came the sesquestration deal that they now want to mooch on.
    Confederacy of Grifters,

    • $16179444

      actually those who stamping their feet and demanding things are the entitlement whores that voted for Obama…..reap what you sow bitch …. soon you’ll wonder why you voted for Obama.

      • WOOF

        I voted not to be governed by an avaricious, meddlesome, secretive priest .

        • $16179444

          instead you voted for some guy who raises the debt, lies and would rather party with celebrities than do his job….of course ignoring the facts seems to be your forte, so pointing out the obvious about the disaster that is Obama falls on deaf ears. enjoy the ride over the cliff…..thanks to you and yours.

          • WOOF

            What part of your lifetime was the country not in debt. No part of mine. Yet here we are, top o the world.

          • $16179444

            top of the world? the ignorance by which you make such a claim is astounding…..the entire world is a the edge – just because you yours doesn’t mean others are doing well. stay blind. pathetic

  • Phil Gay

    If you do not listen to Alex Jones you should put a gun in your mouth (if you live in a state that allows citizen ownership of a gun) and pull the trigger! Alex is 6 months ahead of this information. Glenn Beck steals from Alex Jones.

  • banjo kid

    They covered for Obama for the two years prior to the election in 08 and have been hiding facts about him ever since. The news media is responsible for another four years of do nothing but go deeper in debt

  • $8194357

    Pay attention folks…
    the Bilderbergs last met in Istanbul..
    King makers and global puppeteers doing the devils bidding..

    http://www.barenakedislam.com/2012/11/07/how-barack-hussein-obamas-re-election-paves-the-way-for-a-new-islamic-caliphate-led-by-turkey/

    Quote:

    How Barack Hussein Obama’s re-election paves the way for a
    new Islamic Caliphate led by Turkey

    Obama’s re-election has
    caused a major boost in confidence for countries like Britain and France in
    their wanting to topple Assad. But, it has also given confidence to Turkey, in
    their desire to oust out Assad; but the goal of the Turks is to conquer Syria,
    in order to revive the Ottoman empire. Photo above right is Obama hugging his
    favorite foreign leader, Turkey’s Islamist Prime Minister Erdogan.

  • exsanguine

    Screw the left. They own this bitch now. All of it.
    Let it burn, you’ll get no cooperation from me.

  • yamyam

    There’s the conservatism I remember! Always hoping for failure when they lose!

  • Shortcut

    Too bad that while everyone whines about who is or isn’t paying their fair share, then votes for President on a selfish single issue, the country slides further into the abyss. It’s almost funny that the issue that will have the most effect on everyone seems to be of little concern at election time. Me Me Me Me More More More is the slogan of the obvious majority in the electorate

  • Lynn Bergman

    Invest in Australian gold as you can afford to; PROTECT YOURSELVES from a collapsed dollar… we’re in for a slide down the avalanch chute and there are nothing but big trees at the bottom.

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