Moody’s and Standard & Poor’s threatening America rating

Global markets (Goods) beyond the harsh February

Standard & Poor’s and Moody’s sovereign rating of the United States U.S. again and made it clear in separate statements that if not made Washington further efforts to reduce the budget deficit, this would negatively affect the credit rating her and that if the United States wants to keep classification optimal, it must show a significant trend towards reducing debt.

The agencies said that the agreement on the U.S. budget is far from resolving the issue of public debt, which can not continue in the long term. This comes on the heels of reach bipartisan in the United States for the financial agreement that would save the country, which became known as the financial abyss.

And demonstrates that that U.S. President Barack Obama and House Republicans in Congress will run in battles more about the budget during the next two months after reaching the difficulty of agreement “abyss of financial” to avoid large increases in taxes and cuts a huge spending that would have paid the U.S. economy to recession. The issue highlights the deadline to resolve the debt ceiling crisis at the end of next February as one of the important obstacles.

Obama has vowed to refuse to engage in debate about whether Congress will pay existing bills. Obama said that if he did not pay the U.S. Treasury obligations in a timely manner, it would be so catastrophic repercussions on the global economy as a whole, and will be worse than the consequences of “financial abyss.”

Debt ratios

Moody’s said in a statement that the settlement reached by Republicans and Democrats do not provide a basis for a serious improvement in the rates of U.S. government debt over the medium term and thereafter. For its part, wrote Standard & Poor’s said in a statement that the agreement does not affect too much on the issue of the U.S. fiscal position on a path more viable in the medium term.

Deficit reduction

And saw Moody’s that it is necessary to take other measures to reduce the deficit, saying that these measures should be ratified “in the coming months after new negotiations between Republicans and Democrats. Said that classification of debt linked to the outcome of these negotiations, which will allow to keep the degree of excellence” AT AA “or reduced to “AA 1” under the warning launched last September.

The Standard & Poor’s lowered its part the United States to “AA” last August. Moody’s experts felt that although the two parties have reached an agreement on the adoption of taxes moderately is another step by the government to curb the budget deficit, but that the agency confirmed that it is still waiting for further action to reduce this massive deficit.

Negative rating

The agency said in a statement, which includes estimates of the economic situation in the United States that it will not be possible to raise future negative rating to a “stable” unless the United States took further steps in order to reduce the budget deficit. And grant credit agency Fitch alongside Moody United States a better credit rating, the agency Standard & Poor’s has pulled the country out of this category.

Integrated plan

Although financial welcomed the agreement reached by the Congress except that the IMF considered that this is not enough, demanding that American parliamentarians to agree on a comprehensive plan radically solve fiscal problems. A spokesman for the fund others Rice said in a statement:

We welcome the action taken by Congress to prevent tax increases and public spending cuts harsh but it still requires more to reposition the U.S. public finances on a sustainable path without harming the fragile economic recovery.

He added that the lack of action by Congress will waste the economic improvement in the country. The spokesman continued: in particular should adopt an integrated plan as soon allow at the same time ensuring increased state resources and increase control social security expenditure in the medium term.

Rice felt that it is also essential that the United States lifts quickly ceiling permitted by law to public debt that has already been achieved and work parliamentarians to remove the fears that still exist and on the evolution of the federal state budget in the short term.

Global economy

In the meantime, said American economics professor Dennis Senor The global economy has been suffering for years from the short-term fiscal policy pursued by the United States. Predicted the President of the Institute of World Economy in Kiel that the global economy continues to exposure to pressure in the future if there is no radical change in political thinking in the United States and said that the country lacks a long-term financial plan to reduce debt and stimulate the economy.

Senor added: President Obama did not specify the percentage that must be U.S. debt in the future in the long term compared to the total national income .. What are the speed with which it will stabilize in the budget and how it will overcome fiscal policy on the waves of economic volatility.

Financial slope Law

President Obama signed a bill to override the “financial abyss” that increases taxes on the wealthiest Americans and extend the validity of tax cuts for the middle class. Obama signed it, the bill became effective.

The U.S. House of Representatives passed earlier, a bill to override the “financial abyss”, supported by 257 votes to 167, after hours of approval in the Senate.

Under this law, the U.S. authorities will collect $ 600 billion through new taxes or termination of previous exemptions over the next decade.

The members of the Senate overwhelmingly ratified a 89 votes to 8 contestant on the bill to avoid a “financial abyss.” And “financial slope” or “financial abyss” is a set of laws passed by Congress in prior periods, a result of actions to increase taxes $ 607 billion and cut government spending have been activated automatically on January 2, local time.