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2011 Debt Downgrade: The Economic Collapse That Wasn't

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Remember that shocking moment four years ago when ratings agencies had the gall to downgrade the U.S. debt rating from AAA to AA? It felt like the “shot heard round the world” as other countries sat up and took notice.

The reason for the downgrade was more political than anything else, of course. The debt ceiling crisis was blamed, and so was the lack of a plan by Congress and the President to deal with the burgeoning debt. The ratings agencies weren’t buying another “kick the can down the road” approach, which had been the modus operandi of prior administrations.

You may not know it, but credit ratings have been issued since 1860. The U.S. had always boasted a AAA rating.

There was never a doubt in anyone’s mind that we could pay our bills. The debt downgrade was a dark and embarrassing day for our proud country, but it wasn’t a surprise. Ratings agencies had warned about a downgrade just four months earlier, but the disagreements between our politicians...