01 August 2011

A deal is struck, and US debt is downgraded anyway. Because the issue was never the "ceiling."

Egan-Jones today downgraded US debt from AAA to AA+. You can read the report, but here is the money quote:

We are taking a negative action not based on the delay in raising the debt ceiling but rather our concern about the high level of debt to GDP in excess of 100% compared to Canada's 35%.

It was never about the debt ceiling - it was about the debt. Nothing has changed with the deal.

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