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do you even know what that means kid

explain it to me dad ?

Get ready Tea Party GOP, your out in 2012...

I am shocked that the rating agencies didn't wait until after a default.

But there’s also a more sinister theory afoot—one that involves a game of political hardball between rating agencies, particularly Standard and Poor’s, and the administration. In an exhaustive journal at firedoglake, Jane Hamsher catalogues an interesting confluence of events around Standard & Poor’s threat of downgrade unless $4 trillion in deficit reduction was achieved.

Since the 2008 economic collapse, Congress has been trying to regulate the rating agencies in a tougher manner, in order to force more fair evaluations. The agencies have naturally fought these efforts—and might be making things difficult for the administration as a demonstration of their political power, and to warn the administration off from more stringent regulation.

As Hamsher notes, Standard & Poor’s first debt warning came only months after Obama signed Dodd-Frank into law, which contained regulations on rating agencies, albeit mild ones. This was curious timing, since again there is no chance the United States would experience a debt crisis anytime soon and budget-busting tax cuts previously went unquestioned.

This year, on April 13, Treasury Secretary Timothy Geithner met with officials from Standard & Poor’s and asked them to hold off on any further reports until a budget was completed. But the SEC was in the midst of a series of proposed rule changes and potential investigations of Standard & Poor’s role in the economic collapse. And on that same day, the Coburn-Levin Senate Permanent Subcommittee on Investigations released a report saying the credit ratings agencies were a “key cause” of the financial crisis. The Subcommitee recommended the SEC use its authority to “hold credit ratings agencies accountable in civil lawsuits for inflated credit ratings.”

On April 15, Standard & Poor’s phoned the White House and told them they were issuing a press release providing yet another negative outlook on federal government debt, which it then did. This came at quite a politically sensitive time for the White House, as it was attempting to negotiate a debt ceiling increase with Republicans demanding huge cuts. Geithner had to do a round of talk show interviews the next day, disputing the Standard & Poor’s rating threat.

Me too. Im very curious as to why they did it. I suspect there might be political reasons, because having the USA government with AAA for so long was ridiculous long ago, so why downgrade now?

Revenge for the Dodd-Frank law and to prevent the governments regulation of rating agencies sounds like good motive.  http://www.thenation.com/blog/162555/it-time-downgrade-rating-agencies (http://www.thenation.com/blog/162555/it-time-downgrade-rating-agencies) You have to get a few paragraphs in before it stops detailing government showboating and gets into the juicy bits.