Ratings agencies remain pessimistic about the U.S. credit outlook, regardless of whether Congress and the Obama administration can reach a compromise on deficit reduction before the end of the year and avoid the fiscal cliff, CNBC’s Ansuya Harjani reports.
Sean Egan, managing director of Egan-Jones rating agency, said the United State’s debt-to-GDP ratio has risen rather dramatically, from 75 percent debt-to-GDP four years ago to 104 percent. “The problem in the U.S. is that the debt has grown whereas the GDP has not grown. [While] the U.S. has had the benefit of being the major reserve currency, that only takes it so far,” Egan said.
Egan-Jones has cut America’s sovereign debt rating twice this year, first to AA from AA+ in April, citing concerns over a lack of progress in cutting federal debt; and again in September, to AA-, triggered by concerns that the quantitative easing from the Federal Reserve would hurt the country's credit quality. - Read more at CNBC
SEQUESTER AN IMPORTANT VOTING ISSUE FOR MILITARY Not surprisingly, men and women in uniform say the threat of more than $55 billion of automatic spending cuts to the defense budget beginning in January was extremely important to them in deciding whom to vote for in the presidential election. According to a survey by the First Command Financial, a financial analysis firm, 76 percent of middle-class military families who are aware of the proposed federal budget cuts known as sequestration listed it as a very important issue in this election. By comparison, 51 percent of the general population of middle-class families say the sequester will play a role in deciding which candidate they chose.
“While the budget sequester is an important election issue for many middle-class voters, the proposed reduction in military spending means it is a uniquely personal one for those who have made the military their career,” said Navy Vice Admiral (Ret.) Barry M. Costello of the First Command Military Advisory Board. “This issue is generating considerable financial uncertainty and concern among our men and women in uniform. - Read more at The Herald
GREEN JOBS LOOKING FOR FISCAL CLIFF SOLUTION
Clean energy companies have begun scaling back on hiring because of the economic uncertainty brought on by the fiscal cliff, and many are counting on President Obama to fight to extend energy-related tax credits that Republicans don’t favor. Bloomberg’s Elizabeth Dexheimer reports that the clean energy industry has a lot riding on which tax breaks are spared and which are allowed to expire at the end of the year, including $18 billion of energy- related tax credits such as the production tax credit. - Read more at Bloomberg
For more news on the approaching fiscal cliff, follow us on Twitter @Fiscalcliffnote
