I do not favor the US government wastefulness and its addiction to gluttonous debt. Nevertheless there can be no excuse for the perfectly irresponsible decision by Standard & Poor to go ahead with its press release when a two trillion dollar error was pointed out in its calculations:
"Standard & Poor’s credit agency downgraded the U.S. credit rating using an incorrect budget baseline and now analysts are questioning why they, the government or the American people should listen to an agency that is apparently incompetent." The Economist
"The point here is not so much the $2 trillion, which makes very little difference to real US fiscal prospects; it’s the fact that S&P stands revealed as not understanding basic analysis of budget estimates." Paul Krugman
It is S&P that gave out top ratings to ultimately worthless structured mortgage products that caused the crash of 2008!
You may have never heard of David Beers but every finance minister in the world knows of him. A Wall Street veteran, a graduate of London School of Economics where he has endowed a scholarship in his name, he is the global head of sovereign credit ratings for Standard & Poor's.
It is on his say-so and the committee he oversees that financial markets have been rocked over the last 18 months
Read more at www.reuters.com
Yet there is an overwhelming irony in their new-found prominence. These are the same firms that many blame as prime instigators of the 2007-2008 credit crisis for freely giving out top ratings to ultimately worthless structured mortgage products, allowing the credit bubble to form. Now they sit in judgment of the countries that had to ruin their public balance sheets to prevent financial collapse by saving the banks shattered by those bad instruments once blessed by the agencies.