Article Type

Article

Description

IN downgrading the US sovereign credit rating, Standard and Poors gave the following reason:

“The political brinkmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less efficient and less predictable…. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. …[I]n our view the differences between political parties have proven to be extraordinarily difficult to bridge.”

US politicians have taken the global economy hostage with point-scoring and parochial interests between the Republicans and Democrats. The Republicans wanted to shift the blame on the president and the Democrats for the stalemate on the debt ceiling. The Democrats did not want the Republicans to get all the credit for the breakthrough. The markets did not consider the last-minute compromise credible There are several reasons for the markets to believe this deal will not put the US budget on a sustainable path.

Publication Source

Dawn

Publication Date

8-9-2011

Pages

1-2

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