- CNTV English - CCTV News

SP defends U.S. downgrading amid widespread criticism

08-10-2011 08:56 BJT

Watch Video

Play Video

Standard and Poor's, of the now infamous US debt downgrade, has received a lot of criticism from politicians and investors the world over. The agency's move has erased trillions of dollars in value on global equity markets and sent oil prices spiraling. Yet, S&P's chief of government debt rating unit is holding strong and defends the downgrade.

There is widespread condemnation from Washington to Wall Street of Standard and Poor's decision late Friday to downgrade U.S. debt from AAA to AA+.

David Beers, head of S&P's government debt rating unit, defends the downgrade, saying Washington's intense fighting has increased the risk leaders will have a hard time coming together to clean up America's balance sheet.

Two traders stand outside the New York Stock Exchange on Aug. 8 (Reuters/ Shannon Stapleton)

Beers said, "For medium term fiscal consolidation to be credible, we think there has to be some buy-in across the political divide here. And as we have seen with the agreement last week it's proved it is extraordinarily difficult to get a consensus among Democrats and Republicans both on fiscal choices to be made in the budget now and in the future and also on the balance between spending and revenue decisions. So that debate will continue to play out, we're not sure that a consensus is going to build from here."

Along with the downgrade, S&P has placed U.S. debt on negative outlook, which means there is the chance of another downgrade within 6 to 24 months, depending, in part, in this case, on how much the economy recovers.

S&P's chief of government debt rating unit is holding strong and defends the downgrade.

Beers said, "This has been a subpar economic recovery. It was underscored by the Bureau of Economic Analysis data revisions the week before last, so we still haven't returned to the peak compared to the start of the recession and if that subpar recovery were to continue, that itself would, you know, create additional fiscal pressure, so that's something that we are watching very carefully, closely."

And in S&P's view, if the recovery continues to stumble, the government will see less revenue from taxes. That in turn could make it even tougher to balance the books.

Editor:Li Wanran |Source: CNTV.CN

Hot Videos view more

The celebrations are still continuing as the victorious coach, Joachim Loew, has been honored for his achievement in his hometown of Freiburg.
Germany coach Loew honored in hometown of Freiburg

Chinese men´s national team continued its preparations for next year´s Asian Cup, as they managed a one-all draw against visitors Jordan during a football friendly in Harbin, the capital city of Northeast China´s Heilongjiang Province.
China held to 1-1 draw by Jordan

The defending world champs came into the contest with a perfect 6-and-oh record, but they would be in for a tough first half before opening things up in the second.
USA beat Slovenia 119-76 in quarter-finals

Hot Stories more

UK authorities believe killer of James Foley is a British national

Across the UK the hunt is on for James Foley’s killer, who authorities believe is a British national. As Richard Bestic reports from London, Prime Minister David Cameron cut short his summer break to lead his government’s response.

Israeli war jets renews Gaza strike as truce talks stalled

Three Palestinians were killed and 40 others wounded in the intensive Israeli war jets´ airstrikes on the Gaza city on Tuesday night, shortly before an end of a 24-hour ceasefire in the Gaza Strip,

Missouri police arrest dozens after violent night

As the protests in the town of Ferguson, Missouri turned violent with police facing ´heavy gunfire´ from some ´criminal elements´, cops fired tear gas, stun grenades and arrested 31 demonstrators on Monday night.

Picture in news more

More Video News

Choose TV Program