Standard & Poor’s said the deal does not affect its negative view of the U.S. credit outlook, and said more work remains ahead for policymakers.
The last minute deal passed on Tuesday to avert potentially devastating tax hikes and spending cuts clarifies the medium-term deficit and debt trajectory of the federal government, Moody’s said in a statement.
However, it does not provide a basis for meaningful improvement in the government’s debt ratios over the medium-term, Moody’s said.
“Our ratings stance is to wait and see what the outcome of all of this is in the next few months, before we make any decision on the rating outlook or the rating itself,” Steven Hess, lead U.S. sovereign credit analyst at Moody’s told Reuters.
“It is an important step, but it is the first step,” he said.
Lowering the U.S. budget deficits and setting them on a long-term, downward trajectory is needed in order to return the U.S. sovereign credit outlook to stable from negative.
“On the other hand, lack of further deficit reduction measures could affect the rating negatively,” Moody’s said.
What deficit reduction measures? Raising taxes does nothing to reduce the deficit if continued spending remains unconstrained. Did we pass in constraints in spending? I didn’t think so.
I guess people can be happy we didn’t all have a massive tax increase, we all just had a tax increase, while a few had a massive tax increase. This averted a fiscal crisis which was entirely the creation of president Zero and congress. “Phew!!! We dodged a bullet that our politicians fired!!” “They saved us from themselves!!!!” “Hurray for our leaders!!!”
For their next trick maybe they’ll threaten to close Wall Street unless they can agree on the level of screwing the American people……. just at the last second they’ll come to an agreement on more taxes and save Wall Street.