Click to play videoNew York: Just when the world's most powerful economy narrowly avoided a debt trap, credit rating agency Standard and Poor's (S&P) dropped another bombshell. For the first time in history, America's credit rating has been downgraded from the highest AAA, to AA+. The reason S&P gave that the debt ceiling deal was not enough.
"I think there's plenty of blame to go around. This is a problem that's been a long time in the making well over this administration, the prior administration. It's a matter of the medium and long-term budget position of the United States that needs to be brought under control and not the immediate fiscal position," said S&P Director John Chambers.
The White House has blasted S&P's decision. While the administration blamed the Congress for stalling the debt ceiling debate, the Treasury Department said S&P made a calculation error of $2 trillion. The Fed has assured investors that the downgrade won't have a long-term impact. But few seem convinced.
"I think it is frustrating it shows they're having a debate far above the heads of people that they represent. It shows they're disconnected from the people they're representing," said a lady.
"Eventually something pretty severe is going to have to happen," said a man.
Going forward, S&P sees debt as a percentage of GDP actually increasing that's very worrysome to the credit rating agency, and it says within the next two years it could be possibly again lower the US credit rating.
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