The S&P rating agency has issued a warning that the US government debt may result someday in a downgrading of its credit rating. Such a downgrade would be costly to the government and to taxpayers. The warning is being taking seriously, and indeed, government debt is a serious issue. Lots of pols and commentators have quickly taken up the warning in their talking points, most especially the deficit hawks and Tea Party types.
However.
Does no one see the irony that one of the credit rating agencies central to the financial crisis is being listened to uncritically? Only a few years ago, the rating agencies were neck-deep in the fraudulence that made the financial bubble so frothy. A quote from one S&P agency employee to another during the bubble offered in the context of what were obviously dishonest ratings by the agency: "Let's hope we are all wealthy and retired by the time this house of cards falters."
Our memories are short. I hope we all ask a few more questions before uncritically accepting what S&P and other financial bad actors have to say about government debt.
However.
Does no one see the irony that one of the credit rating agencies central to the financial crisis is being listened to uncritically? Only a few years ago, the rating agencies were neck-deep in the fraudulence that made the financial bubble so frothy. A quote from one S&P agency employee to another during the bubble offered in the context of what were obviously dishonest ratings by the agency: "Let's hope we are all wealthy and retired by the time this house of cards falters."
Our memories are short. I hope we all ask a few more questions before uncritically accepting what S&P and other financial bad actors have to say about government debt.
NPR picks up the why-trust-rating-agencies? thread here:
ReplyDeletehttp://www.npr.org/blogs/money/2011/04/20/135556232/s-ps-role-in-a-post-crisis-world?print=1