U.S. Treasury official says S&P's rating downgrade "wrong decision"
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Xinhua, August 7, 2011
Global rating agency Standard and Poor's (S&P) made a hasty and wrong decision of stripping the United States of its top-notch credit rating, a senior U.S. Treasury official said Saturday.
S&P Friday removed for the first time the AAA long-term sovereign credit rating for the United States and lowered it by one notch to AA-plus.
"Their analysis is poorly and hastily done. By moving so quickly, they made the wrong decision without the right information," the official told Xinhua over the phone on Saturday.
The rating agency should pay more attention to the debt reduction efforts in Washington. There will be close to 1 trillion government debt reduction over the next decade according to the bipartisan debt agreement. A congressional bipartisan committee will also be set up to identify additional deficit cutting in the amount of around 1.5 trillion U.S. dollars, the official said on condition of anonymity.
The official believed that the downgrade won't have big impact on global financial markets as the other two global rating giants Fitch and Moody's retained their triple-A credit rating for the United States.
Market investors know the ropes of the U.S. debt reduction process and the just-signed bipartisan debt legislation, and "there is nothing new in S&P's downgrading report, except for their downgrade decision," said the official.
Obama Tuesday signed a bill that raises the nation's debt limit through 2013 and cuts the deficit by more than 2 trillion U.S. dollars, but the deficit-cutting package fell far short of the 4 trillion U.S. dollars cited by S&P to avoid a downgrade.
The official declined to comment on the downgrade impact on the pivotal role of U.S. dollar in the global financial system, but said that U.S. Treasury securities still remain a safe haven for global investors, as the nation has enormous capacity to pay.
When asked about how the United States can better protect the interest of foreign debt holders including China, the official contended that the best way is to facilitate a robust economic growth and generate more tax revenue in the United States, adding that the nation has gone past the borrowing peak in 2009 after the onset of the financial crisis.
The official rebuffed the emerging worries of a "double-dip" recession of the U.S. economy, saying that the nation Friday released a better-than-expected job market report and the economy was on track to recovery.
