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Monday, August 15, 2011

How the U.S. Debt Deal Will Work

After months of public wrangling over the debt ceiling and ways to reduce deficits, the Democrats and the Republicans finally reached a deal on July 31. The public spat did much to damage the global image of the U.S. and eventually led to a downgrade in its much-vaunted AAA credit rating.

The New York Times gives an interesting lowdown on how the debt deal will work. You can find more here.

2 comments:

Swetha said...

Very informative sir.I am thank full for you & your blog as it made easy for me to get the news from more than one news paper.
1)I think i should know more to understand the complete flow.As far as i understand from the above fig/flow Chart, there would be another raise in debt ceiling. (though there is cut in spending would not suffice.;am i correct in this understanding?)Does it even more lower the Credit rating of USA?

Bharat C. Jain said...

Yes, Swetha, another raise in the debt ceiling is in the offing. The U.S. needs to raise taxes, rather than cut spending. Also, ratings depend more than the whim & fancy of the rating agency, than the actual economic and political picture, as S&P has shown!