Tuesday, April 19, 2011

A gloomy forecast for the economy

Historically, there has been a truism that investors have been able to depend on, through good times and bad: the United States economy is a good economic risk and a safe refuge for investment.

So, it should come as no surprise that a media advisory by Standard and Poor's sent shockwaves through the economic community yesterday as the group threatened to downgrade its AAA bond rating for the United States economy in coming years.

Here's the link:


And, you can find out more about how ratings like this are calculated here.

To sum it up, Standard and Poor's changed its overall forecast of our economic health from "stable" to "negative." It believes the size of our national debt and our inability to balance the budget could soon eclipse the enormous size and diversity that have traditionally made our economy so strong. What are the chances these factors will lead to a downgrade of the economy in the next two years? At least one in three.

The announcement by Standard and Poor's is basically a stunning repudiation of any happy talk about the United States economy improving and an indictment of political leaders for their inaction on pressing economic problems. Elected officials in Washington, D.C. need to take immediate notice. Many speculate that the Standard and Poor's rating could be politically-motivated. But even if it is, the underlying factors are indisputable, non-partisan, and in urgent need of remedy.

And, for that matter, political leaders in all fifty states should take heed of these predictions, as the story really isn't that different when it comes to state budgets. To understand more about our position here in Massachusetts, check our out recent blog post about the condition of the state budget.


  1. More than 100 days and still no jobs or economic recovery bill from House Republicans. It's about time Speaker Boehner stops letting the kids play around with social issues and shows some leadership, or the GOP risks losing the House again, on top of another 4 years of Obama.

  2. Sure....blame the new guys. What about the past 2 years and no jobs bill, no immigration bill, no energy policy, no plan to cut spending, no plan to keep the debt ceiling intact? Yep, same old thing for the last two years....a President in perpetual campaign and golf mode. If it were not for Boehner's leadership, we would never have passed a 2011 Budget. The President can't keep his word on negotiations. Don't plan on 4 more years of disgrace from Obama. Wonder where he was born? Bet Donald finds out......Hope Obama enjoys the Royal Wedding on TV.


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