“Based on historical experience we wouldn’t expect that much financial impact,” Beers said today on the “Fox News Sunday” program. “The markets are reacting to a lot of factors, not just what S&P said on Friday,” Beers said, noting concern among investors that global economic growth may slow.
S&P said in a statement with the downgrade that the U.S. political system failed to adequately address deficit reduction in the compromise law that President Barack Obama signed Aug. 2 to avert a U.S. default on its debt.
The U.S. Treasury Department issued a statement saying S&P had acknowledged an “error” in its calculations, making a $2 trillion mistake. The rating company then changed the rational for its decision, raising “fundamental questions about the credibility and integrity of S&P’s ratings action,” John Bellows, acting assistant secretary for economic policy, wrote in a Treasury blog on Aug. 6.
“That’s a complete misrepresentation of what happened,” Beers said, dismissing suggestions that the downgrade wasn’t justified and saying the U.S. debt burden will rise “most likely over the next decade.”
To contact the reporter on this story: James Tyson in Washington at firstname.lastname@example.org