Has Standard & Poor’s opened the floodgates for further criticism of America’s credit worthiness? Writing for Poland’s Gazeta Wyborcza Business, analyst Alfred Adamiec points out that while downgrading the outlook for U.S. debt is closer to reflecting reality, reticence to actually downgrade U.S. debt shows that the world has yet to emerge from the financial crisis.
For Gazeta Wyborcza Business, Alfred Adamiec writes in part:
Up to now, the economic situation in the United States has been a taboo subject for the financial markets. There has been an unwritten agreement that the U.S. was to maintain its credit rating – not because it is reliable, but because downgrading its debt could trigger another collapse of the global economy.
If economists wanted to be honest, they wouldn’t just lower America’s credit outlook, but its actual credit rating. This fear of making too frank an assessment of the debt of the world’s largest economy demonstrates that the global financial system has yet to recover from the crisis.
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