(VIDEO) Blumenthal: Credit Downgrade Adds 'Doubt' to S&P's Credibility
Senator said credit rating agency's credibility is undermined by "this kind of amateur-hour downgrade, based on figures that were wrong."
U.S. Sen. Richard Blumenthal said he takes seriously every rating about the country’s fiscal situation.
But, the junior senator from Connecticut said in an interview Monday Standard & Poor’s downgrade rating of the U.S. Treasury bonds from an AAA status to an AA+ status has more to do with the “credibility” of the credit rating agency. This, he added, is the same agency gave great ratings to the same bonds before the economic meltdown in 2008.
“The downgrade of U.S. Treasury bonds by one of the rating agencies, S&P, certainly undermines and adds greater doubt about the credibility and integrity of that rating agency, and maybe some of the others,” Blumenthal said following a visit to Naugatuck Valley Community College, “Who participated, by the way in, overrating (and) giving triple AAAs to the bonds that were backed by mortgages that became worthless."
Since the credit rating downgrade on Friday the Stock Market saw declines in the Nasdaq and Dow Jones, according to reports from the New York Times and Wall Street Journal. According to theHuffington Post, S&P has also began downgrading ratings for agencies that are linked to the federal government, such as Fannie Mae and Freddie Mac.
Blumenthal, who was elected to serve in the U.S. Senate this year, once sued S&P when he was attorney general. According to a press release, the former attorney general said both “Moody’s (another credit rating agency) and S&P’s alleged misconduct enabled the worst economic downturn in the nation since The Great Depression.”
The backlash from Friday’s credit downgrade is also being dealt out in the political arena. News agencies reported Monday the back-and-forth banter on the issue between Democratic and Republican lawmakers, as well as the administration of President Barack Obama.
Both sides of the political aisle have blamed each other. Some Republicans, such as Arizona Senator John McCain, who was quoted on Foxnews.com as saying, “I agree that there is dysfunction in our system, and a lot of it has to do with the failure of the president of the United States to lead.”
Meanwhile, members of the Obama administration, such as Treasury Secretary Timothy Geithner, was quoted in an Associated Press article as saying, "They've (S&P) handled themselves very poorly. And they've shown a stunning lack of knowledge about the basic U.S. fiscal budget math.”
Saying he has been “appalled” by the gridlock in the political arena in Washington, Blumenthal then said, “We do need to do more about our debt and our deficit, the size of government and spending needs to be reigned in and reduced.”
“We face a difficult fiscal problem in this country and we need to address it and do it by reducing spending and increasing revenue it has to be balanced approach,” he said. “And I am hopeful that the country will come together and most importantly Congress will put aside some of the partisan differences.”
Daria Novak
10:06 am on Tuesday, August 9, 2011
If an individual has no ability to pay a credit card debt and reaches their credit limit, they don't go to the credit card company and say "increase my limit so I can spend more to get me out of debt." That is exactly what our politicians are doing to us. We voters are not stupid.
Real data from the non-partisan Congressional Budget Office (CBO), and other organizations show that historically every time we carefully decrease taxes we increase the revenue taken in by the US Government. Why? We, in the private sector, are the real job creators not the government.
If we have money to reinvest in our businesses and to save in banks, we expand the economy. At a 25% tax rate, $100 paid in taxes becomes $400 out in the economy by the end of the year. At a 20% tax rate, $100 becomes $500! A 5% tax reduction results in a 20% gain for the economy. Now you tell me, which tax rate is better? Do we let Congress continue to tax and spend irresponsibly or should we hold politicians accountable?
Doing the same thing as in previous years and expecting different results is ignorant at best. Enough is enough. Senator Blumenthal and Rep. Courtney don't get it. They are spending us into bankruptcy and then accusing those who monitor them of falsely reporting it. Are you better off now? Let's get rid of career politicians who support big government programs, high taxes, and over-regulation. Are you with me?
Gene Bartholomew
5:50 pm on Tuesday, August 9, 2011
Something you missed, its not only that we are the job creators, most people do work for small companies ( a fact lost on Malloy), but we are the spenders, we support the ecomomy, we make it grow with discretional spending, when the rich take all, we buy only essentials and the economy dies.
It is apparent that Trickle Down does not work, the theory that de regulating and de taxing the rich would be good was proven wrong from 2000-2008, it is a complete failure and shown throughout history that when one class has all the wealth the system crashes.
We are so incapable of learning from history.
Gene Bartholomew
4:07 pm on Tuesday, August 9, 2011
Depends on what you are talking about @ spending.
Our govt is owned and run by large corporations and they own our news, especially faux.
What we need is an audit concerning defense spending, corporate subsidies, foriegn aid, everything, then we decide what is crucial, S/S is crucial, Medicare/cade is crucial, many social programs are crucial, BUT, they must all be highly regulated AND policed to prevent waste and fraud.
Infrastructure is crucial, we are now at a 3rd World Level in our infrastructure, thanks to the over spending and waste of 2 Bush regimes.
Education, Fire, Police, Prisons, all crucial.
So what isn't crucial? Subsidies (welfare) to large corporations, no bid contracts, military contracts (that are often large fronts for waste and fraud), foreign aid (which is often a front for waste and fraud) read the book "Confessions Of An Economic Hit Man" to learn about what foriegn aid really is.
Any corporations that can afford multi million dollar salaries and multi million dollar bonuses should not be eligible for any govt funding.
What we also need is a flat tax rate with no deductions on personal and business. I figure about 15% personal and 12% corporate would reall stir the economy and redistribute the wealth that has been lopsidedly distributed thanks to the Bush's.
and,...
Gene Bartholomew
4:11 pm on Tuesday, August 9, 2011
...I heard someone on the radio, just a citizen call in, she had a great idea,--- cut all the corporate welfare, fully fund S/S, lower the retirement age with full benefits so that many who have paid into the system can fully retire and enjoy their golden years.
That will open up jobs that unemployed people will fill.
Both of these groups will now go out and spend money, and that will stir the economy even further.
It is quite apparent that Trickle Down does not work, it cut our raises, it tranfered wealth to the top 1% and they did not invest, they hoarded it or spent on wasteful luxuries which killed the economy.
Gene Bartholomew
5:53 pm on Tuesday, August 9, 2011
NATIONAL JOURNAL: What’s the job?
MCCONNELL: The single most important thing we want to achieve is for President Obama to be a one-term president.
What the repubs are doing is hurtng us just so that they, the ones who destroyed this economy, can get back in power to transfer more wealth to their friends.
wake up and smell the coffee