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The NYT Reports on Paul Ryan's Presidential Ambitions and Flat Earthers' Plan for Astronomy DepartmentDean Baker / April 21, 2011
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If the United States Loses Its Aaa Rating Will China Raise the Value of the Yuan Against the Dollar?Dean Baker / April 21, 2011
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S&P Warns Treasury About Debt Burden: Fun With Debt DowngradesCEPR / April 20, 2011
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Fifty-three Members of Congress Urge Obama Administration to Address “Appalling Conditions” in Haiti’s IDP CampsCEPR / April 20, 2011
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The Washington Post Confuses Economic Recovery with Fears of InsolvencyDean Baker / April 20, 2011
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Washington Post Wrongly Claims that the Republican Medicare Plan Will Have "Sizable Savings in Future Costs"Dean Baker / April 20, 2011
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Washington Post Confuses Foreign Debt and Government DebtDean Baker / April 20, 2011
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Overstating the Importance of Temporary Employment in GermanyDean Baker / April 20, 2011
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Will an S&P Downgrade Help Geithner Accomplish His Goal of Lowering the Dollar Against the YuanDean Baker / April 19, 2011
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Robin Hood: A Tax Whose Time Has ComeHa-Joon Chang and Duncan Green
The Guardian Unlimited, April 19, 2011
CEPR, and / April 19, 2011
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Haitian Companies Still Sidelined from Reconstruction ContractsCEPR / April 19, 2011
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Letter to Sen. Durbin Over Social Security Comments on ABC NewsDean Baker / April 19, 2011
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Trapped?John Schmitt / April 19, 2011
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The Washington Post Has Different Definitions of "Too Much" for Public Workers and Wealthy PeopleDean Baker / April 19, 2011
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S&P's Warning on U.S. Debt Prompts Another Front Page Washington Post EditorialDean Baker / April 19, 2011
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Questions for S&P on Its Potential Downgrade of U.S. DebtS&P managed to capture the headlines yesterday when it announced that it had a negative outlook for the credit rating of the United States. After all, an actual credit downgrade for the United States government would be big news. While the immediate response was a boost to the deficit hawks’ efforts to cut programs like Social Security and Medicare, it is worth asking a few questions before we surrender these programs to the Wall Street numbers mavens.
The last time S&P was in the headlines it was for giving investment grade ratings to hundreds of billions of dollars of securities that were backed by subprime and ALT-A mortgages. These mortgages were used to buy over-priced homes at the peak of the housing bubble. Many of these mortgages not only carried high risks, but were fraudulent, with lenders having filled in false information to allow homebuyers to qualify for loans that their assets and income would not justify.
Serious people should ask what S&P has done to improve its ratings systems. Have they changed their procedures? Did the S&P analysts who gave AAA or other investment grade ratings to toxic junk get fired or at least get demoted? If not, should we assume that S&P used the same care in assigning a negative outlook to U.S. government debt as it did in assigning investment grade ratings to toxic assets?
Of course it was not just bad mortgage debt that stumped the S&P gang. It gave top quality investment grade ratings to Lehman until just before it imploded in the largest bankruptcy in history. The same was true of AIG, which would have faced a similar fate without a government rescue. Bear Stearns also had a top rating until the very end, as did Enron. In short, S&P has a quite a track record in missing the boat when it comes to assessing creditworthiness.
CEPR / April 19, 2011
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IMF’s Rhetoric Still Far from Its PoliciesMark Weisbrot / April 18, 2011
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Representative Ryan Makes a Clear CaseDean Baker
Truthout, April 18, 2011
Dean Baker / April 18, 2011