It Actually Occurred: S&P DOWNGRADED the Credit Rating of the United States of America

A very few people, in one company, determined an edict that will have complications to come for quite some time.

Standard & Poors just now downgraded the credit rating of the United States of America for the very first time in its history, from a AAA rating to a AA+ rating.

And that makes every difference in the world. Literally.

Under the watch of Mr Barack Hussein Obama.

You OWN it, sir.

We are now, adrift, in completely uncharted territory.

Standard & Poor’s announced Friday night that it has downgraded the United States credit rating for the first time, dealing a huge symbolic blow to the world’s economic superpower in what was a sharply worded critique of the American political system.

Lowering the nation’s rating one-notch below AAA, the credit rating company said “political brinkmanship” in the debate over the debt had made the U.S. government’s ability to manage its finances “less stable, less effective and less predictable.” It said the bi-partisan agreement reached this week to find $2.1 trillion in budget savings “fell short” of what was necessary to tame the nation’s debt over time and predicted that leaders would have no luck achieving more savings later on.

The decision came after a day of furious back-and-forth between the Obama administration and S&P. Government officials fought back hard, arguing that S&P made a flawed analysis of the potential for political agreement and had mathematical errors in its initial analysis, which was submitted to the Treasury earlier in the day. The analysis overstated the U.S. deficit over 10 years by $2 trillion.

“A judgment flawed by a $2 trillion error speaks for itself,” a Treasury spokesperson said Friday.

The downgrade will push the global financial markets into unchartered territory after a volatile week fueled by concerns over the European debt crisis and the slowdown in the U.S. economy.

Analysts say that, over time, the downgrade is likely to push up borrowing costs for the U.S. government, costing taxpayers tens of billions of dollars a year. It could also drive up costs for borrowing for consumers and companies seeking mortgages, credit cards and business loans.

A downgrade could also have a cascading series of effects on states and localities, including nearly all of those in the Washington metro area. These governments could lose their AAA credit ratings as well, potentially raising the cost of borrowing for schools, roads and parks.

But the exact impact of the downgrade won’t be known until at least Sunday night, when Asian markets open, and perhaps not fully grasped for months. Analysts say the impact on the markets may be modest because they have been anticipating an S&P downgrade for weeks.

This occurred on a Friday, when there are two days before the markets open on Monday. And this has the chance to affect, obviously, every aspect of American finance and commerce. From loans to the prime rate to gas prices to trucking rates to food and water and shelter to the ability of the United States to even defend itself.

Every mortgage in the US could be "called" in a fiscal constriction. Every person owing cash on their homes could find themselves in foreclosure.

This is no joke.

No one has any idea where this could go, in our current environment.

If you think this rating has no affect upon you, you would be so incredibly wrong.

This is uncharted, incredibly uncharted territory. Everything is up for grabs.

BZ