The US credit downgrade

The other day, Standard and Poor’s downgraded its credit rating of the US government, see the report here, USA Long-Term Rating Lowered to ‘AA+’ on Political Risks And Rising Debt Burden; Outlook Negative. 8 pages long, no tables or charts, pure discussions.

The implication of course, for creditors who believe in ratings agencies like S&P, is negative as they will be demanding higher interest rate to compensate for the perceived long-term risks of debt papers to be issued by the US government. One more lesson for many governments who have high or rising debt burden like the Philippine government.

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