“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.”
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