U.S. Senator Richard Blumenthal’s statement on Monday regarding Standard & Poor’s partisan, supply-side rating on government bonds. Shouldn’t the next step be to regulate the same outfits that gave AAA ratings to junk bond derivatives in 2008?
“I commend President Obama for stating what he and many investors have already recognized – that S&P’s overtly political decision to downgrade our nation’s bond rating plays a dangerous game with our nation’s economy and further damages the rating agency’s already questionable credibility. The ratings agencies’ credibility was severely tarnished when they gave high ratings to mortgage securities that brought our economy to the brink of collapse. Importantly, the other major rating agencies have maintained the U.S.’ AAA rating, and sales of U.S. Treasury bonds are on the rise – leaving no doubt that the United States is still an excellent and secure investment. While we staved off a default last week, I remain committed to working to put our nation’s fiscal house in order through a balanced approach that includes making structural changes to the tax code, closing loopholes like ethanol subsidies and tax breaks for Big Oil and companies that ship jobs overseas, cutting spending, and raising revenue. I wholeheartedly agree with the President’s call for action to extend the payroll tax credit to help small businesses create jobs, and for an extension of unemployment benefits that will help those families still struggling in a difficult economy. As we take on the tough challenge of debt and deficit reform, it is incumbent upon all of us to remember that the nexus of any plan or proposal must be creating jobs and economy growth and I look forward to joining representatives from both parties to continue this task.