Matrix Markets: President Obama's Statement on Credit Downgrade (Video) "We will always be a triple-A country"

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S&P downgraded the USA AAA credit rating to AA+, outlook negative, on Friday, August 5, 2011

Political System in Question President Obama said the USA credit rating downgrade by Standard and Poor's, "was not so much they doubt our ability to pay our debt, if we make good decisions, but after witnessing a month of wrangling over raising the debt ceiling, they doubted our political system's ability to act. The markets on the other hand continue to believe our status is AAA". He mentioned that Warren Buffett says the U.S. is quadruple-A, AAAA. "I and most of the world's investors agree". Obama said the USA didn't need a credit rating agency to know that a balanced, long-term approach to deficit reduction is necessary. Likewise, the political gridlock has not been constructive. A prolonged debate with the default used as a bargaining chip did enormous damage to our economy and the world's. This damage came after economic disruptions in Europe, Japan, and the Middle East, which has caused worldwide market problems.

Our Problems Are Imminently Solvable The President said the good news is that "our problems are imminently solvable and we know what we have to do to solve them". With respect to the debt, our problem is not the USA's credit, being among the world's safest. The challenge is to tackle the deficits over the long-term. The Budget Control Act of 2011 made historic cuts to spending. Tax and entitlement reform are necessary now. This requires common sense and compromise. It's not a lack of plans that is the problem, it is a lack of political will in Washington. The problem is the insistence in drawing lines in the sand. It's the refusal to put what's best for the country ahead of self-interest or party or ideology.

Most Immediate Concern Is Jobs Jobs and the slow pace of recovery coming out of the worst recession in our lifetimes are the immediate concerns. By providing a long-term debt and deficit solution, the immediate concerns can be addressed, such as extending the payroll tax cuts and unemployment benefits. Infrastructure programs and spending should be acted on.

We Will Always Be A Triple-A Country "Markets may rise and fall, but this is the United States of America. No matter what some agency may say, we've always been and will always be a triple-A country. For all the challenges we face, we continue to have the best universities, some of the most productive workers, the most innovative companies, the most adventurous entrepreneurs on earth. What sets us apart is that we not only have the capacity but also the will to act. The determination to shape our future. The willingness in our democracy to work out our differences in a sensible way. And to move forward not just for this generation but for the next generation. We're going to need to summon that spirit today. All Americans ask is that we work a little hard in this town to make their lives easier. That's not much to ask."

President Obama's Statement on Credit Downgrade (Monday, August 8, 2011) The President assures Americans that, "we will always be a triple-A country."

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