The World Socialist Web Site has a great analysis of the Standard & Poor's downgrading of US sovereign debt outlook:
Over the past two years, strategic credit warnings and downgrades on the sovereign debt of countries such as Greece, Ireland, Portugal and Spain have been used to encourage speculative attacks on those countries’ credit and whip the respective governments into line. By fostering an atmosphere of intense crisis, these moves are intended to create more favorable political conditions for overcoming popular opposition to the gutting of social services, jobs and wages.This, it seems, is what neoliberalism has been reduced to: credit rating. It's not a new thing; it has always been a tool in the box of prescriptions and policies. But with the collapse of legitimacy (2008), the collapse of the Washington Consensus ("Wikipedia: The term Washington Consensus most commonly refers to an orientation towards neoliberal policies from about 1980 - 2008..."), credit rating has become the only thing that keeps neoliberalism going at the speed it desires. No democracy is needed; it looks to exist outside of politics. It's just a credit rating. But where in the world would money go if America is not a safe bet? China?This is the first time in its 70 years of rating US debt that S&P has lowered its outlook for the US. Over this period, the US has always maintained the highest rating of AAA. Were its debt to be downgraded, the implications for the American and world economy would be far-reaching and convulsive. US Treasury securities have long been considered the safest investments in the world and are held in the trillions of dollars by banks and governments internationally. Their credit-worthiness is bound up inextricably with the role of the US dollar as the leading world reserve and trading currency.
