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Showing posts from August, 2011

Krugman's Take on S & P's downgrade of US rating

I read this article by Paul Krugman first in New York Times, and then again in Economic times and simply loved it both the times. You can find the original article here.

The article:
To understand the furor over the decision by Standard & Poor's, the rating agency, to downgrade US government debt, you have to hold in your mind two seemingly (but not actually) contradictory ideas. The first is that America is indeed no longer the stable, reliable country it once was. The second is that S&P itself has even lower credibility; it's the last place anyone should turn for judgments about our nation's prospects. Let's start with S&P's lack of credibility. If there's a single word that best describes the rating agency's decision to downgrade America, it's chutzpah, traditionally defined by the example of the young man who kills his parents, then pleads for mercy because he's an orphan. America's large budget deficit is, after all, primarily…