The Godfather of Microcredit

The Godfather of Microcredit
An excellent analysis of the Micro credit effort of Muhammad Yunus. Yunus describes his own remarkable efforts in Building Social Business- a New Kind of Capitalism that Serves Humanity's Most Pressing Needs.

Its hard to believe

Former Verizon CEO Ivan Seidenberg made $18.1 million while the corporation got a $705 million federal tax REFUND.

Of last year’s 100 highest-paid U.S. corporate chief executives, 25 took home more in CEO pay than their company paid in 2010 federal corporate income taxes, according to a new report from the Institute for Policy Studies (IPS).

As IPS puts it:

Corporations don’t dodge taxes, the people who run corporations do. And these CEOs are reaping awesomely lavish rewards for the tax dodging they have their corporations do.

“Executive Excess 2011: The Massive CEO Rewards for Tax Dodging“ shows the 25 tax-dodging CEOs the IPS report spotlights averaged $16.7 million in pay last year, well above the $10.8 million Standard & Poor’s 500 CEO average. Most of their companies registered substantial profits. Yet these same companies actually came out ahead at tax time. They collected, on average, $413 million in refunds from the IRS.

At Verizon, where CEO compensation totaled $18.1 million, the corporation got a federal $705 million federal income tax refund.

In addition to handing their CEOs big dollars, 20 of the 25 corporations in the study spent more on lobbying lawmakers than they paid in corporate taxes.

Wartime Contract Commission Finds "At Least $31 Billion" Lost to Waste & Fraud | C-SPAN

Wartime Contract Commission Finds "At Least $31 Billion" Lost to Waste & Fraud | C-SPAN
And today Republican leaders claim that we can not afford to assist people who lost their homes and highways to the recent hurricanes.
And, they assert that we can not spend $100,000 to continue unemployment insurance for the long term unemployed.

Join Nurses Across the Country on September 1 to Demand a Tax on Wall St...

JOIN THE NURSES TO MAKE WALL  STREET PAY TO HEAL AMERICA Urge your legislators to support the tax on Wall Street for jobs, healthcare and education on Main Street! Thursday.  11 A.M. Lungren's Field office. 2339 Gold Meadow Way Gold River, California.  95670

California Progress Report

California Progress Report

Nurses organize for Sept. 1. Join them.

JOIN THE NURSES TO MAKE WALL STREET PAY TO HEAL AMERICA Urge your legislators to support the tax on Wall Street for jobs, healthcare and education on Main Street! Thursday, September 1st 11:00 AM - 12:00 PM Rep. Dan Lungren’s Field Office 2339 Gold Meadow Way Gold River, CA 95670 12:30 PM – 2:00 PM Rep. Tom McClintock’s Field Office 8700 Auburn-Folsom Road Granite Bay, CA 95746

8 Reasons Young Americans Don't Fight Back: How the US Crushed Youth Resistance | Activism & Vision | AlterNet

8 Reasons Young Americans Don't Fight Back: How the US Crushed Youth Resistance | Activism & Vision | AlterNet

This was posted to my wall by a friend. I wonder how others see this. Particularly, how do you see the parts about schools and schooling?

Wall Street's moral hazard

Wall Street's moral hazard
An explanation of how and why the finance industry continues to rob the banks and prevent economic recovery.
the easiest way to rob a bank is to own one.

The Struggles of a Farm Worker

Let's 'Make Them' End the Great Recession | Common Dreams

Let's 'Make Them' End the Great Recession | Common Dreams
This writer from United for a Fair Economy has the analysis right.

Austerity: Why Capitalism Is Choosing Plan B | Common Dreams

Austerity: Why Capitalism Is Choosing Plan B | Common Dreams

A good explanation from economist Richard Wolff.

Torlakson: NCLB sanctions not appropriate

SACRAMENTO—State Superintendent of Public Instruction Tom Torlakson today called on U.S. Secretary of Education Arne Duncan to provide state schools with immediate relief from the flawed policies of the No Child Left Behind (NCLB) Act.

"Relief is needed immediately before more schools suffer for another school year under inappropriate labels and ineffective interventions," Torlakson wrote in a letter to Duncan.

The letter warns that many schools with rising student achievement will be mislabeled as failing under the "one-size-fits-all" approach required under NCLB. In addition, the letter notes that NCLB restrictions on how districts can use funding will further burden schools already hit hard by budget cuts.

Torlakson proposed that California be allowed to freeze the imposition of sanctions and mandatory identifications for the coming school year at last year’s levels.

This Labor Day We Need Protest Marches

This Labor Day We Need Protest Marches Rather than Parades

THURSDAY, AUGUST 25, 2011

Labor Day is traditionally a time for picnics and parades. But this year is no picnic for American workers, and a protest march would be more appropriate than a parade.

Not only are 25 million unemployed or underemployed, but American companies continue to cut wages and benefits. The median wage is still dropping, adjusted for inflation. High unemployment has given employers extra bargaining leverage to wring out wage concessions.

All told, it’s been the worst decade for American workers in a century. According to Commerce Department data, private-sector wage gains over the last decade have even lagged behind wage gains during the decade of the Great Depression (4 percent over the last ten years, adjusted for inflation, versus 5 percent from 1929 to 1939).

Big American corporations are making more money, and creating more jobs, outside the United States than in it. If corporations are people, as the Supreme Court’s twisted logic now insists, most of the big ones headquartered here are rapidly losing their American identity.

Rhee- Kevin Johnson talk about school "reform"

Rhee;

University of Arkansas | Clinton School of Public Service

Mayor Kevin Johnson on the State of Public Education

Kevin Johnson; Michelle Rhee, founder Students First.

Presentation-Discussion held on Feb.25, 2011. At University of Arkansas.

I watched this program with interest.  I am glad that I did.  You can read on this blog several posts criticizing Rhee and her work in Washington D.C.( see below)  What I found interesting was that I agreed with at least 70% of what she said about the need for school reform.  I also watched Mayor Kevin Johnson’s descriptions of school change here in Sacramento. Since he was describing local events, I had the background needed to assess his statements.

While I agree with the issues of the crisis in schools, I don’t agree with the assertions blaming the teachers unions.  However, putting that aside there is another issue.   Mayor Johnson ( who it turns out  chairs a committee of Mayors advising Arne Duncan) entered the issue of last hired first fired- or the use of seniority to lay off teachers.  Now, why is that the  issue?

We have serious budget cuts that are eliminating important programs for students.  The budget cuts come from an ideology about economics that argues we can cut our way out of a recession. But, Mayors and educational leaders should be opposing the budget cuts. Instead, they are selecting and creating a fight about who gets laid off first.

This may well be a consequence of the funding of such advocates by conservative foundations.

http://www.dailykos.com/story/2011/08/18/1008309/-Rhees-StudentsFirst-received-Murdoch%C2%A0money

and, www.prnewswire.com/news-releases/walton-family-foundation-invests-49-million-in-teach-for-america-126247638.html

Make Wall Street Pay-

JOIN THE NURSES TO MAKE WALL STREET PAY TO HEAL AMERICA Urge your legislators to support the tax on Wall Street for jobs, healthcare and education on Main Street! Thursday, September 1st 11:00 AM - 12:00 PM Rep. Dan Lungren’s Field Office 2339 Gold Meadow Way Gold River, CA 95670 12:30 PM – 2:00 PM Rep. Tom McClintock’s Field Office 8700 Auburn-Folsom Road Granite Bay, CA 95746 On September 1st, nurses across America will lead Main Street actions to publicize support for a Financial Transaction Tax on Wall Street to repair Main Street and begin restoring economic fairness to our nation.  For more information, please visit www.mainstreetcontract.org.

Anti-Teacher Union “Reformers” Hoisted on Own Petard | California Progress Report

Anti-Teacher Union “Reformers” Hoisted on Own Petard | California Progress Report
by Randy Shaw.

L.A. Unified bests reform groups in most cases, data show

L.A. Unified bests reform groups in most cases, data show

Corporations Asking For Huge Tax Break Refuse To Say How Many Jobs They Create Overseas

Corporations Asking For Huge Tax Break Refuse To Say How Many Jobs They Create Overseas: pAs the American economy continues to struggle through a sluggish recovery, some of the nation’s largest corporations are refusing to disclose “a number they don’t want anyone to know”: the number of workers they employ in the United States versus the number employed overseas. Among the companies are several that are actively lobbying Congress for [...]/p

Schools short on money, but long on tests

Stephen Krashen,

Schools are "facing tough budget choices" (August 24) and cutting back on teaching positions, tutors, support staff, summer programs, and extracurricular activities. According to an ASCD survey (SmartBrief poll, 2011-12), 78% of respondents said that they are "experiencing a lack of funding and it has affected student learning.

 

Unmentioned in the Ed Week article is the fact that at the same time money is so short, we are keeping a number of useless tests and actually increasing testing to astonishing levels, in the face of empirical evidence showing that these tests do not increase student achievement

A clear example of a current useless test is the High School Exit Exam used in many states. Studies consistently show that high school exit exams do not lead to more college attendance, increased student learning or higher employment. In fact, researchers have yet to discover any benefits of having a high school exit exam.

The US Department of Education is planning an astonishing increase in testing. In addition to end-of-year tests, there will be tests in reading and math near the end of school year and testing several times during the year (interim testing), In addition, the Department is encouraging pre-testing in the fall and testing other subjects as well.  Recently, the Department announced plans to test children before they enter kindergarten.  In addition, all tests will be administered on-line, a huge expense.  There is no evidence that the new tests will help children.

We all agree that assessment is part of teaching and learning, but our philosophy should be "no unnecessary testing":  Determine which tests are useful and eliminate the others. Over-testing is choking our schools both intellectually and financially.

Stephen Krashen

Why won't Michele Rhee talk to the press?

By MICHAEL WINERIP

N.Y. Times.— Why won’t Michelle Rhee talk to USA Today?

Ms. Rhee, the chancellor of the Washington public schools from 2007 to 2010, is the national symbol of the data-driven, take-no-prisoners education reform movement.

It’s hard to find a media outlet, big or small, that she hasn’t talked to. She’s been interviewed by Katie Couric, Tom Brokaw and Oprah Winfrey. She’s been featured on a Time magazine cover holding a broom (to sweep away bad teachers). She was one of the stars of the documentary “Waiting for Superman.”

These days, as director of an advocacy group she founded, StudentsFirst, she crisscrosses the country pushing her education politics: she’s for vouchers and charter schools, against tenure, for teachers, but against their unions.

Always, she preens for the cameras. Early in her chancellorship, she was trailed for a story by the education correspondent of “PBS NewsHour,” John Merrow.

Jobs, Jobs, Jobs. -Bernie Sanders

Jobs, Jobs, Jobs, - Bernie Sanders

Bernie Sanders is not running for president. Though he has expressed frustration with the direction of the 2012 campaign—going so far as to suggest that President Obama could use a primary challenge—Sanders will seek another term in the Senate next year.

But while he is not running for the presidency, Sanders is delivering the sort of speeches—and outlining the sort of agenda—that could animate the stale and lifeless 2012 campaign.

Indeed, the Vermont senator is making more fiscal and economic sense than anyone who is running—for either of the major party nominations in 2012.

“While everyone understands that we have got to reduce the deficit, the number-one challenge America faces right now is a jobs crisis,” the independent senator declared, while decrying the fact that more than 16 percent of American workers (25 million American) are either unemployed or underemployed.

Striking Verizon workers deserve our support

Lawrence Mishel

Lawrence Mishel is the president of the Economic Policy Institute and the senior co-author of The State of Working..
Update: the strike has been suspended. No one won- yet.  The economics of the post continue to be excellent.

The Verizon Corporation is asking its workforce to accept wage and benefit reductions—despite being a very profitable company. Morgan Stanley’s recent analysis shows Verizon’s net income from ongoing operations was $13.9 billion in 2010, up more than 16 percent from 2007. No wonder Verizon’s stock has outpaced that of the S&P index and other telecommunication’s firms, something Verizon itself brags about in its last annual report. How, then, can Verizon freeze current workers’ pensions and eliminate pensions for new workers? Ask their workers to accept reductions in holidays (to seven), reduced sick pay and the substitution of the current health plan with one having high deductibles and contributions? The unions involved estimate that benefit and wage reductions would total $20,000 per worker each year.

About the Author

Understandably, the workers have gone on strike. This labor conflict, however, is a microcosm of a broader trend in our economy, one that is not healthy for overall growth and certainly not conducive to improved living standards for America’s working families.

American workers are beset by a deep recession that continues with no end in sight. Unemployment has been roughly 9 percent or above each month for over two years and underemployment has correspondingly remained at 16 percent or more. At some point over the course of the year, one out of three workers (four out of 10 Hispanic or black workers) will be unemployed or underemployed. Simply put, we have been stuck for a long time with unemployment that is worse than even the worst moments of the last two recessions. The consequence is that a June poll showed that 43 percent of adults have been either unemployed or have an unemployed family member. Some 61 percent of respondents knew a family member or friend (or themselves) who personally experienced a reduction in wages, benefits, or hours worked. The misery from persistent high unemployment is widely shared. Unfortunately, the consensus of forecasters expects unemployment to still be 8.5 percent at the end of 2012, so the misery will continue.

In stark contrast, businesses are doing exceedingly well. The Commerce Department has recently reported that corporate profits have increased by a third since the start of the recession: this is a very impressive gain since the economy is still smaller than it was before the recession began.

The U.S. remains in the Great Recession

The U.S. and California are in a recession- a long recession.   Some communities are in a Depression.  Poorly informed  or uniformed writers and talking heads in the media contest- we can not decide if we are entering a new recession.  They arrive at this strange question because they are looking at profits and corporations.

For working people the Great Recession continues.  It is the deepest recession since the Great Depression.

In July the unemployment rate for persons who did not graduate from  high school was %15. For high school graduates it was 9.3%.  For persons with a Bachelor’s degree or higher it was 4.3.

In July   unemployment in the Black community stood at 15.9 %.  For the nation as a whole, unemployment was virtually unchanged at 9.1% in the month of July. Among whites, unemployment was 8.1%; among Latinos, unemployment was 11.3 %.

What are the consequences?  See the above  video by National Nurses United.  


We must fight back.

The President proposes more jobs - its about time

The President’s Bold Jobs Bill (Maybe)The President is sounding like a fighter these days. He even says he’ll be proposing a jobs bill in September – and if Republicans don’t go along he’ll fight for it through Election Day (or beyond).That’s a start. But read the small print and all he’s talked about so far is extending the payroll tax cut and unemployment benefits (good, but small potatoes), ratifying the Columbia and South Korea free trade agreements (not necessarily a job-creating move), and creating an infrastructure bank.

An infrastructure bank might be helpful, depending on its size. Which is the real question hovering over the entire putative jobs bill – its size.

Some of the President’s political advisors have been pushing for small-bore initiatives that they believe might have a chance of getting through the Republican just-say-no House. They also figure policy miniatures won’t give aspiring GOP candidates more ammunition to tar Obama as a big-government liberal.

But the President is sounding as if he’s rejected their advice.

That’s good policy and good politics.

We need to create a California state bank

 U.S. companies keeping their money abroad to avoid taxes.  These taxes could be used to hire teachers, police, firemen, etc.

Microsoft.  $42  Billion, Cisco systems. $38. 8 Billion, Google, $16 Billion. According to the N.Y. times, JP Morgan Chase estimates that U.S. based multinationals hold $1.375 Trillion outside of the U.S.

Many of these companies pay more taxes outside of the U,S., and a higher percentage of taxes outside of the U.S. than in the U.S.

What is an alternative?  Well to start with we should create a publically owned California bank to promote California prosperity. We need a bank that is a part of democratic planning in which what is invested, where it is invested, and how it is invested in democratically decided.

For example, the people of California are currently paying for, and will pay in the future for, a trans bay bridge at a cost of about  $13.5 Billion. The original proposal was for a  $3.5 Billion bridge.  The steel  for this bridge is being manufactured and created in China- while California has a 11.5  % unemployment rate. Where were these decisions made? Who made them?  Someone profited from these decisions, not you and I.

If we created a Bank of California, like the Bank of North Dakota, we could create a public utility like SMUD (The Sacramento Municipal  Utility District) to collect, manage and direct our tax money.  This would save us all  money.  When the state needed money, it could borrow from the bank and pay ourselves interest instead of paying Wells Fargo.

Why do the Koch brothers want to end public education?

See how the oligarchy subverts public schools.

Stiglitz: more stimulus needed

Optimists argue that the short-run macroeconomic
impact of the deal to raise America's debt ceiling and
prevent sovereign default will be limited-roughly $25
billion in expenditure cuts in the coming year. But the
payroll-tax cut (which put more than $100 billion into
the pockets of ordinary Americans) was not renewed, and
surely business, anticipating the contractionary
effects down the line, will be even more reluctant to
lend.

'The end of the stimulus itself is contractionary. And
with housing prices continuing to fall, GDP growth
faltering, and unemployment remaining stubbornly high
(one of six Americans who would like a full-time job
still cannot get one), more stimulus, not austerity, is
needed-for the sake of balancing the budget as well.
The single most important driver of deficit growth is
weak tax revenues, owing to poor economic performance;
the single best remedy would be to put America back to
work. The recent debt deal is a move in the wrong
direction.'

Economist Joseph Stiglitz
Sydney Morning Herald
August 9, 2011
http://tinyurl.com/3jgxg4r

Texas Miracle? Perry cuts schools

by Andrew Leonard.

Let's outsource some commentary to Barbara Bush, mother of the last Texas governor before Perry. In an opinion piece published for the Houston Chronicle on February 5, warning against new cuts to education funding, she wrote:

Our schools are in crises: We rank 36th in the nation in high school graduation rates. An estimated 3.8 million Texans do not have a high school diploma. We rank 49th in verbal SAT scores, 47th in literacy and 46th in average math SAT scores. We rank 33rd in the nation on teacher salaries.

Two days later, in an article discussing Texas' $25 billion dollar budget deficit, the L. A. Times' Evan Halper, quoted Texas Lt. Gov. David Dewhurst's view on how to deal with the hole in state finances.

"A lot of the things we are doing arguably aren't priorities for the people of Texas," he said. "People could stake me and Gov. Perry on the ground and torture us, and we still would not raise taxes."

That's Texas: Don't even think about messing with taxes! And so, the inevitable result: This week Texas legislators took a big step toward resolving the state's financial problems by approving a new budget with $15 billion in cuts "to all levels of state government, including health care." $4 billion of those cuts will hit public education.

Rise Up !

We must fight back.

Blueprint for Great Schools?

Legislature- heal thyself. 

A new strategic report for California schools, A Blueprint for Great Schools, was released by the State Superintendent of Public Instruction on Aug.9 and included a number of valuable recommendations. ( available at www.cde.ca.gov).  We have seen these reports before.  Recall the Getting Down to Facts report of two years ago that was to be the culmination of years of research?

The new Blueprint sets out a new mission for the California Dept. of Education.  At least the report will due no harm. 

Lets suppose however, that you wanted to actually improve California schooling.  What would it require? For this post I will focus specifically  what would be required to  reduce  the California drop out rate.  I reluctantly conclude that only a few ideas  in the Blueprint would assist.

What would it take?  First. Increase the number of counselors in the schools and the number of social workers in high poverty schools.  California ranks 49 out of the 50 states in these categories.  The social workers could organize parents into the “wrap around” services mentioned in the blueprint.

Why won’t we add these counselors and social workers?  Because that costs money.  And, this is the key failing of the Blueprint.  Although it details the money issues in the section on finance, it offers no directions nor solutions.  

To improve the schools would require adequate funding of the schools – see Robles-Wong et al v State of California.

European Central Bank and the "Sovereign Raiders"

European Central Bank and the "Sovereign Raiders"
See Economist William Black explain the European "sovereign" debt crisis in Greece, Spain, Ireland and how it is not like the U.S.

California High School Drop Out Rates

SACRAMENTO—State Superintendent of Public Instruction Tom Torlakson announced today that nearly three out of four California students who started high school in 2006 graduated with their class in 2010, with slightly more than 18 percent dropping out rather than completing their K–12 educations.

The graduation and dropout rates continue to show a significant achievement gap between students who are Hispanic, African American, or English learners and their peers. The 74.4 percent statewide graduation rate and 18.2 percent statewide dropout rate—as well as rates calculated for counties, districts, and schools across California—were for the first time based on four-year cohort information collected about individual students using the state’s California Longitudinal Pupil Achievement Data System (CALPADS).

“For far too long, the discussion about graduation and dropout rates has revolved around how the results were obtained. Now, we can focus on the much more important issue of how to raise the number of graduates and lower the number of dropouts,” Torlakson said.

Cornel West AND Tavis Smiley Refuse To Say They Will Vote To Re-Elect Ob...

Pedro Noguera Address to the Save Our Schools March

Credibility, debt, and the downgrade

Credibility, Chutzpah and Debt

By PAUL KRUGMAN

To understand the furor over the decision by Standard & Poor’s, the rating agency, to downgrade U.S. 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 the result of the economic slump that followed the 2008 financial crisis. And S.& P., along with its sister rating agencies, played a major role in causing that crisis, by giving AAA ratings to mortgage-backed assets that have since turned into toxic waste.

Schools Matter: Is CNCA Charter Corporation Poaching Parents and P...

Schools Matter: Is CNCA Charter Corporation Poaching Parents and P...: "'Parents having decision making power over a budget is not a sustainable model.' — Ana F. Ponce (CEO, CNCA Corporation) One of Los Angele..."

Matt Damon defends teachers against a [expletive] cameraman!

Why be a teacher? Matt Damon on teachers.

Counter Punch: Up the Revolution

Counter Punch: Up the Revolution

Here is an opportunity to read how the major corporations have made billions while working people have not recovered from the recession.  And, Republicans refuse to tax these people.

The Debt- the Wrong thing to worry about.

The Wrong Worries

By PAUL KRUGMAN N.Y. Times.

In case you had any doubts, Thursday’s more than 500-point plunge in the Dow Jones industrial average and the drop in interest rates to near-record lows confirmed it: The economy isn’t recovering, and Washington has been worrying about the wrong things.

It’s not just that the threat of a double-dip recession has become very real. It’s now impossible to deny the obvious, which is that we are not now and have never been on the road to recovery.

For two years, officials at the Federal Reserve, international organizations and, sad to say, within the Obama administration have insisted that the economy was on the mend. Every setback was attributed to temporary factors — It’s the Greeks! It’s the tsunami! — that would soon fade away. And the focus of policy turned from jobs and growth to the supposedly urgent issue of deficit reduction.

But the economy wasn’t on the mend.

What everyone should know about the debt "crisis"?

Mark Weisbrot Folha de Sao Paulo (Brazil), August 3, 2011 Nieman Watchdog, August 4, 2011 Since the U.S. “Debt Crisis” has been a big international story for the last few weeks, it is worth clarifying what is real and what is not. First, the U.S. government does not have a “debt crisis.” The U.S. government is paying net interest of just 1.4 percent of GDP on its public debt – this is not much by any historical or international comparison. The relatively large annual deficit at present (9.3 percent of GDP) is overwhelmingly the result of the recession and weak recovery. The long-term deficit projections are driven by health care costs in the private sector. These spill over into public spending because the U.S. government pays for almost half of health care spending, at a rate that is twice as high as other developed countries – and rising fast. There was never any chance that the U.S. would actually default on its debt. The whole “crisis” was manufactured from the beginning, with Republicans in the House of Representatives using a technicality to win unpopular spending cuts that they could not win at the ballot box. It worked: They got an agreement that promises large spending cuts without any tax increases on America’s rich or super-rich, who have vastly increased their share of the national income over the past three decades. The right won because President Obama chose to collaborate with them, also seeking to take advantage of the manufactured “crisis” to implement cuts that offended and hurt the people who voted for him. Of course he also wanted to increase taxes on the rich, but because he had accepted the legitimacy of the Republicans’ extortion, he lost that too.

Tea Party Hostage taking produces debt rating downgrade

The inability of the U.S. government to operate rationally, as demonstrated in the recent hostage crisis over the raising of the debt ceiling, has led to the first ever downgrading of U.S. Credit Rating.  This may cost the gov. states, and counties, and individuals, billions in interest on credit.
The Republican Party has managed to not only stop any recovery during Obama's first term, but they have  also crippled the United States of America's economy despite only controlling the House of Representatives and half of our state Governments. They know how to abuse power.

Standard and Poor.  United States of America Long-Term Rating Lowered To 'AA+' Due To Political Risks, Rising Debt Burden; Outlook Negative

* We have lowered our long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA' and affirmed the 'A-1+' short-term rating.
* We have also removed both the short- and long-term ratings from CreditWatch negative.
* The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics.
* More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.
See video in the post below.