S&P sends a very clear message to Washington

What S&P had to say about the state of the States

Shot sent across the bow of our leaders in Washington on Monday that says cut the crap, cut the spending, cut our budget deficits and get the country's fiscal house in order, or else!!!

You want to end up like Greece or one of the other PIGS?

Do you think that the types of rates being paid by the government of a country like Greece are sustainable? Of course they aren't! Without fiscal controls the chart below is where a country ends up. Today the PIGS, tomorrow the U.S.?

What did Standard and Poor's actually have to say? The analysts report is below, but in a sentence it is that the party's over and there is a one in three chance for a downgrade of the United States to occur.

• We have affirmed our 'AAA/A-1+' sovereign credit ratings on the United

States of America.

• The economy of the U.S. is flexible and highly diversified, the country's

effective monetary policies have supported output growth while containing

inflationary pressures, and a consistent global preference for the U.S.

dollar over all other currencies gives the country unique external

liquidity.

• Because the U.S. has, relative to its 'AAA' peers, what we consider to be

very large budget deficits and rising government indebtedness and the

path to addressing these is not clear to us, we have revised our outlook

on the long-term rating to negative from stable.

• We believe there is a material risk that U.S. policymakers might not

reach an agreement on how to address medium- and long-term budgetary

challenges by 2013; if an agreement is not reached and meaningful

implementation is not begun by then, this would in our view render the

U.S. fiscal profile meaningfully weaker than that of peer 'AAA'

sovereigns.

Read the full analysis at S&P here.

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