Austerity buys Britain - yes - a credit downgrade!

[Mr. Big Dog 10,747]

Moody's strips Britain of triple-A rating in major blow to Osborne

Moody's said weak prospects for British economic growth, which have thrown the government's deficit reduction strategy off course, lay behind its decision to cut the rating by one notch to Aa1 from Aaa.

Austerity has been the watchword for Osborne's fiscal policy since his Conservative-led coalition came to power in 2010 after an election in which he vowed to defend Britain's triple-A rating, which can help keep down borrowing costs.

But a very slow recovery from the financial crisis has pushed back by at least two years the government's goal of largely eliminating the budget deficit by 2015's election.

[Ban Hammer 13,400]

what's the rating of the usa?

[OnMyWayID 1,489]

Heavy borrowing in the first place got it the downgrade.. It is never a permanent solution, it is just pushing problems into the future... and now its the future. Don't blame Austerity, it is the natural outcome of pushing the economy past the breaking point. But hey maybe if they borrow even more they will owe less tomorrow.. I'll try that excuse with some brownies and my diet. The weight is sure to drop.

As Moody is the one downgrading them what do they say??

Moody's said that "a combination of political will and medium-term fundamental underlying economic strengths will, in time, allow the government to implement its fiscal consolidation plan and reverse the U.K.'s debt trajectory."

The problem is the debt.. The problem is the debt.. The more debt, the fewer options, They (and we) are all past the point of using debt as a useful tool.. If they made a list of the absolute stupidest things Britain could do right now #1 through #5 would be to borrow more money.. Nothing *Nothing* could be a more stupid and selfish course of action.

Edited February 23, 2013 by OnMyWayID

[Mr. Big Dog 10,747]

what's the rating of the usa?

The US rating was brought down for very different reasons.

[Mr. Big Dog 10,747]

Heavy borrowing in the first place got it the downgrade.. It is never a permanent solution, it is just pushing problems into the future... and now its the future. Don't blame Austerity, it is the natural outcome of pushing the economy past the breaking point. But hey maybe if they borrow even more they will owe less tomorrow.. I'll try that excuse with some brownies and my diet. The weight is sure to drop.

As Moody is the one downgrading them what do they say??

Moody's said that "a combination of political will and medium-term fundamental underlying economic strengths will, in time, allow the government to implement its fiscal consolidation plan and reverse the U.K.'s debt trajectory."

The problem is the debt.. The problem is the debt.. The more debt, the fewer options, They (and we) are all past the point of using debt as a useful tool.. If they made a list of the absolute stupidest things Britain could do right now #1 through #5 would be to borrow more money.. Nothing *Nothing* could be a more stupid and selfish course of action.

Austerity has already brought a double dip recession to Britain which now actually finds itself on the verge of experiencing a first ever triple dip recession after the British economy contracted again in the 4th quarter of 2012. Bottom line, the British economy stopped growing years ago when Britain went onto the austerity path. As a result, Britain's debt is not only growing in real terms but even more so relative to Britain's economy. That growing debt to GDP ratio and the trajectory of that ratio is why the credit rating was downgraded. And the source of that problem is austerity. Britain could have pursued a growth path but decided to shrink it's economy instead. It ain't working. Never has. Never will. You pull back government spending in flush years not on the tail end of a recession. Unless, of course, you like double dips, triple dips or full blown depressions.

[Póg mo 1,749]

So according to Moodys they are so confident in the UK's medium and long term abilitity to control its debt, they have decided to down grade the country! Right! What ever you guys say!