Monday, April 23, 2012

Another Obama Downgrade

The Egan-Jones Ratings Company has again downgraded our country’s credit rating.  Egan-Jones previously reduced our rating in July of 2011.

One of the primary movers for the decline was the fact that the US Debt has increased so much under Obama.  In his three years in office, the US Debt has increased more than under the entire eight years of George W. Bush.

That’s pretty bad.

Specifically troubling to Egan-Jones was that the US total debt now equals its total GDP and is likely to surpass it very soon.  When it does, it will have a cataclysmic effect on finance, including raising mortgage rates.  Their projection was that Debt would be 114% of GDP by 2014.

Another factor that contributed to the downgrade was the failure of the government to pass a budget that will reduce the deficit.  Bob Casey and his cohorts in the Senate have not passed a budget in over 1,000 days.  That injects a great deal of uncertainty into the finances of our nation.

As they said in February, S&P is likely to follow suit for many of the same reasons.

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