, Columnist
Bond Investors Have No Use for Politics or Credit Ratings
A decade ago, political strife provoked S&P to downgrade U.S. debt. The strife got worse, but the debt took flight on a joyride that hasn’t ended.
Nobody stopped.
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It's been 10 years since Standard & Poor's took the unprecedented step of lowering the flawless AAA grade of U.S. debt.
The credit rating company said at the time that it had been forced to act by “political brinksmanship” in Congress, where cycles of drama over raising the debt ceiling to avoid default made the world's largest economy “less stable, less effective and less predictable.” In response, Treasury Secretary Timothy Geithner denounced what he called the rating company’s “terrible judgment,” and declared that “there's no risk the U.S. would never meet its obligations.”