S&P targeted by top economic voices
August 7th, 2011
10:40 AM ET
7 years ago

S&P targeted by top economic voices

Washington (CNN) - Two top financial voices from different sides of the aisle voiced outrage on Sunday over Standard & Poor's downgrade of the United States’ credit rating, but disagreed on whom to put the blame.

Steve Forbes, CEO of Forbes, Inc. and a former Republican presidential candidate called S&P's downgrade from AAA to AA+ Friday, "an outrageous move" given that the government can still pay the interest and principal on its bonds.

"I'm surprised S&P would play politics," Forbes said on CNN's "State of the Union."

Larry Summers, former director of the National Economic Council under President Barack Obama, agreed that the U.S. will pay its debts.

"S&P's track record has been terrible and as we've seen this weekend its arithmetic is worse," Summers said on CNN's "State of the Union." "So there's nothing good to say about what they've done."

In a report Friday, S&P ruled that the plan agreed upon by Congress and the Obama administration to raise the debt ceiling fell short of the necessary measures to stabilize the government. They also cited dysfunctional policymaking as a factor in the downgrade, the first for the U.S.

But Summers placed the blame on House Republicans, who he said "played chicken with America's credit worthiness." He also defended the Obama administration, whose stimulus program at the beginning of the administration helped economic growth and who he said could not have foreseen the European financial crisis or high energy prices.

"God knows if we hadn't pursued these policies we would be looking at another version of what happened in the 1930s," Summers said.

Forbes defended Congressional Republicans, who he said were elected to "undo the fiscal damage" of the Obama administration.

"We're like an automobile going 25 miles per hour when at this stage we should be on an open highway going 75 miles per hour," Forbes said.

It is the slow growth, Forbes said, that is causing private capital to flee overseas.

"They don't see productive investment opportunities here at home and that has to be laid at the feet of the Obama administration," Forbes said. "They're the ones that put in this massive spending and the health care and all of these other regulations. Can't blame all that on George Bush."

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Filed under: Economy • Larry Summers • Steve Forbes • TV-State of the Union
soundoff (41 Responses)
  1. Donkey Party

    Biggest hoax besides Sasquatch and Elvis sightings? The GOP giving a crap for America.

    August 7, 2011 10:46 am at 10:46 am |
  2. tim

    Actually, what is outragous is the politicians who are allowed to steal from us while the press sits by looking at the pretty flowers.

    August 7, 2011 10:52 am at 10:52 am |
  3. diridi

    GOP and Tea Party thugs to be blamed, idiots....it is true....these bastards ruined this nation. Don't you know??????It is not Obama...definitely Obama...o.k, it is GOP...o.k,

    August 7, 2011 10:54 am at 10:54 am |
  4. diridi

    definitely not Obama....it is GOP thugs..I stress on it...o.k,

    August 7, 2011 10:55 am at 10:55 am |
  5. PAul

    It's "principal" not "principle".

    August 7, 2011 10:56 am at 10:56 am |
  6. TM

    Forbes has his father's name, but NONE of his insight, so it's no wonder he'd stick up or Bush. House Republicans, specifically the Teabaggers, CREATED this problem. It's long past time for them to take responsibility. You don't get to break something and then prevent anyone else from fixing it.

    August 7, 2011 10:58 am at 10:58 am |
  7. LCSWquilter

    It concerns me that the Republicans support spending cuts only, while the Democrats support spending cuts and raising revenues/taxes. How can the Republicans lay the blame at the feet of the Democrats only? They turned down the Grand Bargain! THe American people see this.

    August 7, 2011 11:09 am at 11:09 am |
  8. Randy, San Francisco

    Can we really trust S&P to give an honest and fair rating? Why wasn't S&P held responsbile for giving good ratings to financial institutions and products that caused the economic melt down. Is S&P controlled or influenced by Rupert Murdoch? Is someone regulating the rating agencies like S&P and Moodys? Congress should call for investigations.

    August 7, 2011 11:10 am at 11:10 am |
  9. MAC

    I have seen interviews of the S&P CEO , I can see his point that politicians are not reliable enogh to trust the cuts will really happen. The stuck the largest cuts years 7 thru 10, they used fuzzy math, and our debt has been growing at an unsustanable rate for years. If you believe the S&P downgrade is due to the Tea Party you must have just opened your ears and eyes this week for the first time in your life. The Tea Party has finaly brought debt, taxes, and spending to the forefront. Any politician who blames the Tea Party solely for this down grade is a LIAR!!!!!

    August 7, 2011 11:13 am at 11:13 am |
  10. thejoe

    YES, we can and do blame it all on Bush and the Republicans and now we not only have the Tea Party running our country we have S&P too. Vote the Republicans out, what more do you want to see under them a full blown depression. That is what will happen under the Tea Party, Republicans and the S&P. Wake up America.

    August 7, 2011 11:15 am at 11:15 am |
  11. mark whitt

    jobs get people back to work, close loopholes in the tax codes, fine companies that out source their work to other countries, rebuild our countries infrastructure, and reduce our dependency on fossil fuel!

    August 7, 2011 11:32 am at 11:32 am |
  12. vic , nashville ,tn

    House Speaker John Boehner said he "got 98 percent of what I wanted" he didn’t care the nation
    Obama proposed 4.2 trillion cut and tax the wealthy S & P also want the to keep the AAA
    First time I agree with vice president comment they acted like "terrorists."

    Obama said they "manufactured a crisis" this also true now

    August 7, 2011 11:33 am at 11:33 am |
  13. ck1

    this is about obama's massive, out of control spending, period. he is in way over his head. this is also about the democrats inability to even address reforms for social security and medicare. democrats are driving us over a cliff.

    August 7, 2011 11:45 am at 11:45 am |
  14. Dan

    I thought Obama is the president, can veto bills, and has a lot of power, No? Blaming others though has been his game! It was Bush, then Europe, now Japan and the house republicans. Something is wrong and there are no real achievement, so all the administration is left with is the blame game. Summers tries to also protect his own personal dubious record!

    August 7, 2011 11:46 am at 11:46 am |
  15. Indy

    Boehner said he got 98% of what he wanted, so does he own 98% of the blame ? This is really a problem that took 10 years to hit the bottom and the debt ceiling fiasco sealed the deal. It is useless to blame S&P because we all know they are not going to change a thing right now. Get some tax revenue and vote out the Republicans that have done everything in their power to make Obama fail, and have done everything they can to shift the focus off the economy and job creation, even though they ran on and were elected on job creation. Everyone knows it was a 10 year problem and there is blame for the full 10 years so go ahead and put 25% on Obama's 2.5 years in office, but the only way to get the economy rolling is to make it good for the economic drivers which is the MIDDLE CLASS. If you think Obama is good for the middle class get behind him and support the heck out of him, and if you think Republicans will do the most for the middle class then vote for them. Every economy is driven by middle class and that is where the focus has to be.

    August 7, 2011 11:47 am at 11:47 am |
  16. ingrid

    I blame the GOP and specifically the tea party. They are a disaster and detrimental to the US economy and its recovery. Down with the tea party!!!

    August 7, 2011 11:50 am at 11:50 am |
  17. GOP/TEA party must go!

    Republican / TEA party = American Terrorist

    August 7, 2011 11:55 am at 11:55 am |
  18. sharon

    Can someone please tell me how can we WAKE UP some people when they have been sleeping for years. We the people need to stop relying on the GOP, Republicans and standup take matter in our hands. Like re-invest in America by becoming united & helping one another. Back in the day we used to have vegetable garden and share with neighbors (no more) we used to barter with our neighbors (no more). Now everyone out for themselves trying to out do one another. If we can come work to getter we can rebuild America.

    August 7, 2011 11:57 am at 11:57 am |
  19. Claudia, Houston, Tx

    As the Republicans continue to install their "Aparthied" government with no Middle Class the U.S. ratings won't matter anymore.

    August 7, 2011 11:58 am at 11:58 am |
  20. Tuna


    The S&P is one of the reasons that we are in the economic situation that we are in. They gave all their great ratings to all the bundled mortage bonds that the banks were selling for billions of dollars of profit which was paid to their people in huge bonuses. Why would we even care what these people have to say. They did not even looks at all the facts.

    August 7, 2011 12:00 pm at 12:00 pm |
  21. Chipster

    FYI: Principal is the person who manages a school. On principle, the President should have invoked the 14th Amendment and taken the heat for it instead of agreeing to keep the "temporary" tax cuts for the wealthy and leaving tax loopholes in place.The U.S. needs revenue! We're still paying for 2 wars, 2 Bush bailouts, and unfunded Medicare Part D! I agree with the person who suggested fines for companies that take their business offshore. Best thing I've read all week: "We don't drink the water in Mexico so why should we buy Kellogg's cereal (or Hershey's chocolate?) that's made there?" American consumers need to learn what's made offshore and boycott it.

    August 7, 2011 12:07 pm at 12:07 pm |
  22. T'sah from Virginia

    Since BOEHNER got 98% of what he wanted – then this downgrade – in my opinion – belongs to HIM and the Republicans who felt they needed to take America HOSTAGE in order to DISRUPT the steady flow of "recovery" that was already in progress under President Obama over the past 2 years!!! A steady flow of recovery that was WORKING until 2011 when the Republicans took control of the HOUSE!!! ............................... THINK ABOUT IT!!!!!!

    And on top of it – just WATCH and you shall see – the RIGHT will continue to BLAME President Obama ONLY – not them, not the Tea Party, not Congress!! Their main goal is to make President Obama a one-term President. They DO NOT care if it means “crashing” the market or losing our credit rating – You heard them, the TP at its best – “Don’t raise the debt ceiling – let the market CRASH!!!!!”

    Even though we all DRINK, You can’t blame it on the alcohol –
    Blame the far-RIGHT maniacs who could care less how we fall!!
    As long as they succeed in materializing one specific downfall
    Making President Obama a one-term President – that’s all!!

    August 7, 2011 12:11 pm at 12:11 pm |
  23. Henry Miller, Libertarian

    But Summers placed the blame on House Republicans, who he said "played chicken with America's credit worthiness."

    Still play the kids' game of "It's all his fault!"

    Grow up, Mr Summers!

    August 7, 2011 12:14 pm at 12:14 pm |
  24. Kate

    News Flash @ck1 and the like: The President does not create the US budget or dictate spending. That is the job of CONGRESS. Clearly you hate this president but you still can't assign blame for "out of control spending" on the oval office. Congress introduces ALL the legislation having to do with taxes and spending and they voted and passed ALL spending initiatives . Creating tax & spend legislation is practically their ONLY job. They are the ones who over-spent on our Country's credit, then played chicken with our nation's financial reputation when it came time to pay the bill. It's fine to be mad at politicians, they deserve it. But learn something about how government works before you start ranting.

    August 7, 2011 12:17 pm at 12:17 pm |
  25. Rick McDaniel

    Frankly, i appreciate the move of S&P, because it forces the people of America to face their spending addiction, their welfare addiction, and their shipping of manufacturing off shore, leaving no jobs in America.

    Time to face reality, and stop being in denial.......and way past time, to keep listening to the lies of the Democratic Party, who are destroying our economy.

    August 7, 2011 12:19 pm at 12:19 pm |
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