On Aug. 5, 2011, Standard & Poor’s lowered the US sovereign credit rating to ‘AA+’ from ‘AAA' and removed the rating from CreditWatch negative. This is a first time for the US since it won the top ranking in 1917. The downgrade is mainly due to political risks and rising debt burden. The debt ceiling had been increased, and the election is near.
S&P also downgraded the bailout-saved mortgage giants Fannie Mae and Freddie Mac because of their reliance to the government. Its funny how the US promotes a free market without the intervention of the government (laissez-faire), but in the end, an intercession is proven to be inevitable.
Now, according to S&P, the US is unlikely to see its long-term credit rating return to AAA any time soon. 'Anytime soon' is a vague statement, which normally comes from a politician. Apparently, S&P is considering the headache currently faced by investors worldwide. I would interpret it to be at least 10 years.
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