It was this bad. (Note that this Goldman Sachs chart also shows that Obama’s budget would have resulted in the pulling of the automatic tax hike/debt cut trigger suggested in his new budget speech/plan). The WH plan is OMB FY 2012 Budget:
Here is what the Treasury Department has to say about S&P’s bomb:
“This morning, S&P affirmed the AAA rating of the U.S., but emphasized the importance of timely bipartisan cooperation and action on fiscal reform. In addition, Moody’s commented today that ‘we view the changed parameters of the debate, with broadly similar goals as to government debt levels, as a turning point that is positive for the long-term fiscal position of the U.S. federal government.’
Barclays bank offers its take on S&P. Here are some highlights (bold is mine):
1) A couple of hours ago, S&P put its long-term rating on U.S. sovereign debt on negative outlook. This means that it believes there is at least a 33% chance that it will lower the AAA long-term rating of the U.S. within two years.
The White House believes America’s debt problem is an important issue, but not an urgent one. Bond rating firm S&P seems to think differently: