Top US Economic Advisor Blasts S&P over USD 2 TN Blunder

World | August 7, 2011, Sunday // 14:57|  views

S&P, one of the world's three major rating agencies, downgraded America's top-notch AAA rating to AA+. File photo

A top economic adviser to the White House has condemned the S&P downgrading of the US credit rating, saying it had been a stunning mistake.

"It smacked of an institution starting with a conclusion and shaping any argument to fit," said Gene Sperling, the Head of President Barack Obama's National Economic Council, cited by BBC.

In a statement Sperling points out S&P had made a USD 2 TN mistake in their calculations.

S&P on their part announced that after discussions with the US Department of Treasury, they have altered their economic conclusions, but without impact on their decision to downgrade the US credit rating.

The rating agency Standard & Poor's (S&P) on Friday downgraded America's top-notch AAA rating to AA+.

S&P, one of the world's three major rating agencies, failed to be impressed by a last-minute deal in the US last week to raise the US debt limit by up to USD 2.4 TN from USD 14.3 TN, saying a potential US government default on its debt was avoided, but only achieved after months of bickering between Democrats and Republicans in Congress.

The credit rating downgrade is seen as a major embarrassment for President Obama's administration. It could also raise the cost of US government borrowing.

White House spokesman Jay Carney said on Saturday that last week's debt deal had been "an important step in the right direction", but that "the path to getting there took too long and was at times too divisive". He said the US must now "do better".

Meanwhile, Bulgarian Prime Minister, Boyko Borisov, assuaged fears the downgrading will have a negative effect on the country's economy.

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Tags: Gene Sperling, President. Barack Obama, National Economic Council, Prime Minister, Boyko Borisov, American, debt, crisis, credit rating, US, S&P, rating agency


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