August 8th, 2011
01:41 PM ET

Your take: Where do you stand on S&P downgrade?

[Updated at 1:41 p.m.] The inability of Congress and President Barack Obama to reach a deal to raise the debt ceiling sparked a firestorm of anger directed toward Washington. Readers said they were angry, disappointed and fed up. They had no problem about where to point the finger when it came to blame. Quite frankly there was downright outrage.

And now Standard & Poor's has downgraded the U.S. credit rating by one notch to AA+, removing it from the Triple A-club for the first time in history.

CNNMoney.com: Did S&P get it right? | Time.com: A political miscalculation

As the market reacts to the downgrade status, CNN.com wants to know how people feel about it. Grab a video camera and sound off on iReport here.

Some iReport contributors are already speaking out about the downgrade, whom it affects and how much the American public understands and cares about the issue.

Egberto Willies, a frequent iReport political commentator, says he believes that the S&P downgrade of the U.S. is “a fraud on the American middle class.”

“The reality is, Standard & Poor's and all these organizations are the same companies who rated credit default swaps that brought down the economy and forced us to get into further debt to bail out the financial sector,” he argues in his video. “They're the ones who allowed that to occur.”

Omekongo Dibinga says he thinks Americans simply don’t care what the country’s credit rating is.

“Most Americans are too busy worrying about their own credit to care about America's credit rating,” he says in his video.  “With our AAA rating, we've still had a Great Depression and a Great Recession. People have still lost their homes and thousands of jobs. Is this what our rating got us?”

Dibinga says the lowered rating may even serve as a needed wake-up call for politicians and corporations.

"Maybe this credit will be good for America," Dibinga said. "Maybe these corporate types at the top will start to think twice, but for the rest of us, we're going to wake up tomorrow and our life won't seem to have changed because of a downgrade.”

Melissa Fazli from Yorba Linda, California, sent a video reaction shortly after the S&P downgraded the U.S. credit rating. She says that everyone should pay as he goes: “No more debt.”

She says she also believes the downgrade is “a kick in the face” but hopes that people will vote for politicians who will “wake up” and “get their act together and work together.”

And those commenting on CNN.com and CNNMoney.com haven't shied away from sharing their views either. Here's a sampling of what you had to say:

"S&P was absolutely right to downgrade the US government–the country is frighteningly deep in debt. For decades, the federal government has proved itself utterly incompetent in managing the taxpayers' money and this is the result. And if government can't manage our money responsibly, it's time to cut up the credit cards–we need a balanced-budget amendment." - CNN commenter HenryMiller

" The S&P is full of it. This is the same agency that assured investors and gave excellent ratings to toxic mortgage back derivatives. They are
responsible with the banks for the finical [sic] crisis and now they are playing more games and leading us into a double dip. Make no bones, they have their own agenda. I would not be surprised if they are short-selling and making out like bandits. These people are all crooks!!!" - CNN commenter Daniel Tal

"good for S&P....you clowns in Washington want to act like fools? You get called on it!!!!!" - CNN commenter stooges999

"And they are "sticking by their decision"? Wonder if the S&P is also "sticking by their decision" on the sub-prime mortgages the touted as
AAA before the collapse in 2008???" - CNN commenter esmith3750

"Anyone who listens to S and P after the crimes they committed during the financial meltdown is an idiot" - CNN commenter Jon King

In response to that comment user Barfly52 wrote: "Looks like investors are listening. Market down 325 points in first 75 minutes."

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Filed under: Business • Economy • Finance
soundoff (1,062 Responses)
  1. Amy

    you like to bash and talk about what other people are doing, but you don't want to solve anythng, just complain that we don't throw money as fast as we can at it.

    August 8, 2011 at 2:59 pm | Report abuse |
  2. Brent Hales

    As a professor of economic development, I am not at all shocked by the downgrading. Sustainability of a market is based on the ability of balancing supply and demand. The federal government has run its affairs in such a way as to inflate both the demand for goods (budget spending) and the supply of money (debt) so as to unsustainably continue increasing its spending level while simultaneously cutting revenues. We as tax payers are to blame for much of it because we clamour for change but only if it means fewer obligations and more benefits. A simple in/out examination demonstrates that this is neither sustainable in the short term nor the long term. The percentage of our debt that goes to paying for interest alone is greater than the sum of most of the world's budgets. The money spent outside our country buying off governments to play nice with the US is equally is appalling, particularly when we consider the countries to whom this money is flowing. It is not to our "friends."

    This article is correct in its assertion of the American outrage. However, much of this outrage is misguided. We for too long have demanded that we not only have our cake and eat it too, but that we put on a credit account with no plans of paying it back. The challenge we have is to redirect this ire to decipher better mechanisms for addressing our fiscal house. We can no longer afford to be the world's ATM, bookie, or drug pusher. We have created a model of dependency that is truly unsustainable. Is it any wonder that the world's markets are quivering at the thought that our economy might slow down and not support their proverbial green drug (money handouts) habit? Of course not.

    Like Americans across our great nation, I too call on the President and Congress to get it right. We must take a serious look at our interests (and interest) abroad and at home. It may take following Florida's lead and requiring more of those who depend of the benefits of the social welfare system. It may take not giving huge payouts to "friendly" governments so that they remain our friends. It may take bridling our passion for wants and settle on needs. It is time for America to wake up and realize that it doesn't need to be the world's bank/trust/charity/bookie/dealer. Anyway you cut it, we need to tighten our belts.

    August 8, 2011 at 2:59 pm | Report abuse |
    • swpoet

      Amen!

      August 8, 2011 at 3:05 pm | Report abuse |
    • Bec215

      @Brent – I agree with the vast majority of what you say... the problem is that it's not only self-interested banks that are acting as our puppetmasters...it's also A&D firms. From a Political Science perspective, security comes first – without security, there is no state. So while the easiest $3billion cut we could make today is cutting off Israel's foreign aid, which they use to buy weapons and planes from US A&D companies. But we'll never be able to do it because the only leverage we have when Israeli politicians go ballistic – literally – is that $3b, without which their mlitiary would suffer and they'd become vulnerable. This is the blowback we now face – if we cut off Israel, they may very well start a regional war out of sheer pride.... and they have superior weaponry they bought from US companies with US $$$... who's going to be blamed in that case? We have created similar problems elsewhere in the Mid East and Gulf – but it's done, and un-doing it isn't feasible from a security perspective...

      August 8, 2011 at 3:10 pm | Report abuse |
    • Glenn

      I appreciate your analysis very much, well said, but I believe you are incorrect sir and here's why:

      It is too easy to say that the American people basically want more services without having to pay for them. I think that is true of course. But I don't believe that is the problem. I feel the problem is that in America, we are structured like a business. A business will base its goals on profit margin, being in business to make money.

      The question then becomes, if you were a business and you wanted to make money, but a Government regulation on, oh lets say 'Mortgage Lending', wouldn't you try to get past that regulation, spending the money upfront for lobbyist and political advertising campaigns to in the end reap in billions of dollars stealing the home savings and mortgages paid by the middleclass? Just think, all these people paid their mortgages for years and all the sudden they can't afford them, so the bank gets the homes again and can sell them again at full price. Amazing accounting right?

      What about the money made off the Iraq and Afghanistan wars that went to private sector companies for Security contracts.

      See, I think you believe that this was all just a big if/then scenario where if the Americans wanted to spend money on this, then they would have to eventually pay for it. But I believe that we have created a culture of independent success: A homeless person crossing the street as the rich person sits in his comfortable mercedes benz at the light. Everything is self motivated.

      This, I believe, is why we have 2 Trillion in revenues that companies are sitting on, but won't reinvest into our Labor force because it doesn't work with their 'profit margin protection accounting'

      or why even though we overspent on National Defense, and the Bush Tax Cuts: Now we are looking at cutting Social Security, Medicaid/Medicare, Unemployment Benefits, and services to the community for the middleclass.

      Someone is taking advantage of America for the sake of profit and that someone is us.

      August 8, 2011 at 3:18 pm | Report abuse |
    • Chuck in Jasper, Ga.

      Interesting that as a "professor of economic development" you barely touch on the substance of what a budget consists of. A budget is more than expenditures. It is also revenue driven. Debt is the result when expenditures to not total more than the receipts.You also completely avoid addressing that reducing receipts while increasing expenditures was the causative effect of what has gotten us to this junction or level of debt? Is there a reason for these omissions? To further expound on my statement so that it is understandable and not simply a bunch or double speak.. Reducing receipts by passing laws that gave an across the board tax reduction of 3% to all brackets of the tax schedules during the Bush era while simultaneously increasing expenditures that could not be funded with the current receipts were in fact the primary causative factors in the current debt. In order to reverse this trend, and regain a balanced budget in as short a time as possible, receipts of revenue must increase as well as reducing expenditures. In other words, return to the tax rates that were in place prior to the budget becoming unbalanced which created this massive deficit as well as the rate of expenditures. Reducing expenditures alone will not accomplish much if anything at all. But we must remember Republicans have vowed not to raise taxes, which in of itself is a misleading "soundbite" that a lot of people have swallowed. Reverting to tax rates of ten years ago is no more an increase in taxes than returning to the amount of expenditures from 10 years ago is a reduction in spending. One way to start reverting to previous expenditure amounts is to end unfunded wars. Our so called foreign aid is a drop in the proverbial bucket compared to these wars, yet you never mentioned that FACT. I wonder why?

      August 8, 2011 at 3:33 pm | Report abuse |
  3. libfreak48

    A $2 trillion mistake and rating CDOs as AAA. Why are we letting these people grade us...?

    August 8, 2011 at 3:02 pm | Report abuse |
    • C

      People wanted accountability in Wall Street after the stock market losses of the past couple of years. Looks like they got accountability of the government too!

      August 8, 2011 at 3:16 pm | Report abuse |
  4. virtualgd

    I always knew we were doomed when this idiot was put in office.

    August 8, 2011 at 3:03 pm | Report abuse |
    • Proud to be an American

      This is what you get when America chose an affirmative action President instead of the best candidate for the office.

      August 8, 2011 at 3:08 pm | Report abuse |
    • Meki60

      Worst president of all, past, present and future.

      August 8, 2011 at 3:09 pm | Report abuse |
    • Chuck in Jasper, Ga.

      As opposed to previous genius right? Are you even paying attention or do you just spew vomit like a drunk?

      August 8, 2011 at 3:38 pm | Report abuse |
  5. pat

    Perhaps with all of the hot air coming from within S&P they will implode onto themselves.

    August 8, 2011 at 3:04 pm | Report abuse |
  6. L. Lomack

    It is sad that we can not see the truth, and the truth is, we have been had by Wall Street and S&P. What a joke they robbed us, take people pensions and stocks and enjoy the high life. While we sat around blaming the President who has been trying to save us. The Republicans want no regulations, not minimum wage, no safety rules for workers,
    and no FAA or Protection Agency for the American People. Yes, we are going to have to, bite the bullet, but so are the
    people on Wall Street, who cause our financial problems. Get off their dam a$$ and help this Administration created
    jobs, which that they have destroy or sent overseas.

    Forget China and India, without our buying power, they would be in the same boat. They are so fast to condem us, but we can overcome these problems, if we work together as Americans, that means all of us, no matter what color we are,we can save the US. Because we are all in the same boat, we either swim together, or we sink together.

    August 8, 2011 at 3:07 pm | Report abuse |
    • Glenn

      For a long time I looked at Africa and the many problems the people had there and said, 'They are such a rich country, with all of their natural resources. Yet the people in government there only aim to take advantage of profits for themselves, leaving the people with less than nothing."

      Now I see, America is now doing the same thing. Money IS the root of all evil, because money leads to want not need, and want leads to greed not love, and greed has destroyed every civilization since the beginning of time.

      August 8, 2011 at 3:31 pm | Report abuse |
  7. Jeff

    What John Chambers and the S&P Sovereign Ratings Committee did is nothing short of committing "economic terrorism". If you want to bring down the USA simply turn an already struggling economy even more upside down. Congratulations S&P, you committed a terrorist act and you will get away with it!

    August 8, 2011 at 3:07 pm | Report abuse |
  8. Apathy

    Ok, I'm not an economics professor; I am just an everyday kinda person. I can't help but notice that the whole stock market tumble seems like a case of hysterics. When my credit isn't as good as it could be, I make efforts to correct it. I don't go out and sell the farm, for Pete's sake!

    August 8, 2011 at 3:08 pm | Report abuse |
  9. Jack

    The "Credit Rating" agencies and the employees that work for them are all criminals in my opinion. They have the accountablity of a Sociopath, the intellect of a third grader and the ethics of a serial rapist. What any of them say or have an opinion about shoudl fall on deaf ears. They should be obsolete.

    August 8, 2011 at 3:08 pm | Report abuse |
    • Apathy

      Nice, Jack! I completely agree! Who's watching the watchers???

      August 8, 2011 at 3:11 pm | Report abuse |
  10. Rob

    S&P ? aren't these the geniuses who gave high ratings to the mortgage backed securities that started this whole mess ??

    August 8, 2011 at 3:11 pm | Report abuse |
  11. James Doerrer

    S&P is just having a hissy fit. Since they lost $$$$ from their AAA ratings of those bungled up home loans that took us down they want to fix us by destroying the USA

    August 8, 2011 at 3:11 pm | Report abuse |
  12. gw

    I don't buy the claim that "everyone's to blame." Obama angered everyone as he tried to move toward compromise-the right saw him as some kind of socialist, the left thought he'd sold out to the Republicans, and the Tea Party folks admitted that they'd signed a "pledge" to stop any revenue increased and, in effect, held the country hostage. Where Obama does have some "blame" is that he didn't just stop the whole thing by declaring as President, he was going to pay the bills, invoke the 14th Amendment, Section III and let the lawyers duke it out in court. In the meantime, he could have just abolished the debt ceiling, leaving the Tea Party with Denmark in having a debt ceiling.

    August 8, 2011 at 3:11 pm | Report abuse |
  13. bubba

    most peoplein the world are already poor and struggling..i hope this affects the rich people so they get an idea of how life really is..broke hungry,jobless,homeless,etc..

    August 8, 2011 at 3:11 pm | Report abuse |
    • Glenn

      Me too. But unfortunately this will bring the prices of stocks down, which will make them go on a spending spree to buy up all the failing corporations merging them into super companies that they bought for pennies on the dollar. With the foreclosures that will comes out of this rise in interest rates the rich will buy up homes for 1/2 price and sit on them until the market returns then make a fortune. Do you know how many billionares were made out of the last recession? They can afford to wait it out, buying up stock when we've finally hit bottom. This is a game to them, they are buying your 401k, your pension, your savings for cheap. INTELLIGENT GREED. Pure and simple. Only when we become Somolia will they commence 'white flight' and finally leave our shores. But when we finally do build this once great nation back up, they will come again with their campaign signs and TV ads asking for more of our created wealth as contributions, and investments. Just remember, they may have all the money, but it is you who are truly happy in spite of it.

      August 8, 2011 at 3:46 pm | Report abuse |
  14. George P.

    The SEC and any regulators should overlook S&P with a fine tooth comb and F&%# them in the A$$.

    August 8, 2011 at 3:12 pm | Report abuse |
  15. Tony

    I wonder why they waited so long. This is probably the best thing that could have happened to this country. At least people are talking about the debt now. We have to stop all of the waste. It is insane to subsidize airports in remote areas that can't support an airport. Where where where did anyone get the idea that air service is an inherent right? People move to these areas to get away from it all and then want all of the amenities that go with living in urban areas. Well I shouldn't have to pay for them. (Flood insurance for people who keep building and rebuilding in flood areas is another good one.) When will we stop this insane ethanol boondoggle? All farm subsidies? College is not an inherent right either. Half of the people who start to college don't finish and should never have started in the first place. We need mechanics and electricians as much as we need teachers and engineers. Trade school is as important as college. Besides a college degree is a joke these days anyhow. We are giving degrees to absolute idiots. Why is remedial reading, remedial math being taught in college. You shouldn't be allowed in college if you can't read or do simple math. Make it MORE difficult to get in college, not easier!!! No student loans. It is criminal that anyone has to hire someone to do his income tax. The tax code is complicated beyond belief. We need a flat tax with no deductions for anyone for any reason. How seriously would anyone take me if I said that I can't pay my bills because my credit card company won't raise my credit limit? It is just as ridiculous for the federal government.

    August 8, 2011 at 3:12 pm | Report abuse |
    • George P.

      I completely agree. It is way to easy to get into college. And student loans are going to ruin the lives for many students who just don't understand that it is not 'free' money, and that the job market will not sustain repayments.

      August 8, 2011 at 3:28 pm | Report abuse |
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