Economy

Moody’s May Downgrade US–Becomes White House Ally

Source: OECD Statistics Moody’s threatened to downgrade America’s sovereign debt primarily because the Democrats and Republicans cannot settle on a compromise to increase the debt cap. The action will probably add pressure to House Republicans who are seen by the…

By Douglas A. McIntyre
Published June 2, 2011, 7:38pm ET · 1 min read

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Source: OECD Statistics

Moody’s threatened to downgrade America’s sovereign debt primarily because the Democrats and Republicans cannot settle on a compromise to increase the debt cap. The action will probably add pressure to House Republicans who are seen by the public, whether correctly or not, as the aggressors in the debate. Republicans have called for massive budget cuts to steady the deficit increase and part of those plans may involve a retooling of Medicare,, a very unpopular idea among citizens over 50..

 
“Moody’s Investors Service said today that if there is no progress on increasing the statutory debt limit in coming weeks, it expects to place the US government’s rating under review for possible downgrade, due to the very small but rising risk of a short-lived default. If the debt limit is raised and default avoided, the Aaa rating will be maintained. However, the rating outlook will depend on the outcome of negotiations on deficit reduction. A credible agreement on substantial deficit reduction would support a continued stable outlook; lack of such an agreement could prompt Moody’s to change its outlook to negative on the Aaa rating.”
 
And, a settlement is not enough, in Moody’s eyes. The government also needs to make substantial progress as it sets budget levels over the next decade.
 
Douglas A. McIntyre
 
 
 
 
 
 
 

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Douglas A. McIntyre

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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