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Fri Jan 11, 2013, 10:32 AM

Would #MintTheCoin Bring About Another Downgrade of America's Credit Rating?

Source: www.slate.com

I asked John Piecuch, director of communications at Standard & Poor's, whether. He cautioned that the agency wouldn't go into too much detail gaming out a hypothetical. But he didn't exactly ring the bells of doom.

"What our rating speaks to is the ability and willingness to pay the debt we rate, commercial debt, on time," said Piecuch. "But policy that improves or detracts from the capacity of the government to pay its debt is also part of our analysis. Another thing to factor in here: S&P has five pillars that analysts look at in terms of sovereign ratings. One of them is the fiscal score, which includes the debt to GDP trajectory; one is the political score. In terms of the political aspect, the current acrimony over these issues is already incorporated into the rating, at the AA+ level."

In other words, the ratings agency isn't particularly worried about how the U.S. avoids default. It's worried about the country's ability to pay the bills. An effective end-run around the crisis, one that would pay the bills, might do the trick.

Read more: http://www.slate.com/blogs/weigel/2013/01/10/would_mintthecoin_bring_about_another_downgrade_of_america_s_credit_rating.htmlLink to source



So S&P gives a pass. What an interesting debate this is turning out to be! What do you guys think of what John Piecuch said?

4 replies, 1122 views

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Reply Would #MintTheCoin Bring About Another Downgrade of America's Credit Rating? (Original post)
RetroGamer1971 Jan 2013 OP
Jackpine Radical Jan 2013 #1
Yo_Mama Jan 2013 #2
grahamhgreen Jan 2013 #3
Wolf Frankula Jan 2013 #4

Response to RetroGamer1971 (Original post)

Fri Jan 11, 2013, 10:46 AM

1. I think the platinum coin is an interesting dodge around Republican obstructionism,

and will not affect our "credit rating."

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Response to RetroGamer1971 (Original post)

Fri Jan 11, 2013, 12:07 PM

2. We're probably doomed to that anyway.

The ratings firms have already pointed out that the tax bill falls far short, in their opinion. They're just waiting until Congress raises the debt limit.

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Response to RetroGamer1971 (Original post)

Fri Jan 11, 2013, 12:34 PM

3. NOT the question!!! Is it better or worse than failing to pay our debts!!!!! (Obviously not, duh)

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Response to RetroGamer1971 (Original post)

Fri Jan 11, 2013, 12:43 PM

4. Let's have the SEC look into S&P's rating

Especially their rating of junk debt AAA.

Wolf

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