S&P’s Dubious Downgrade of U.S. Is a Reminder on Revenue: View

We’ll find out soon enough what the markets will make of the decision by Standard & Poor’s to downgrade its rating of U.S. sovereign debt to AA+ from AAA. But the early response from the people who matter most in the controversy -- the Asian and European nations that Hoover up Treasuries -- seems to show a score of: U.S. 1, S&P 0.

The playing down of the downgrade by officials in Japan, South Korea, Britain, Russia and elsewhere (China, the biggest purchaser, has been vague) was probably to be expected. After all, the value of a rating service comes when it digs deep into a corporate balance sheet and finds things that catch potential investors unawares. In this case, the budgetary shenanigans and political machinations of Washington are completely and embarrassingly out in the open, and S&P’s report didn’t contain one iota of information the public didn’t already know.