Lawrence Summers, the former economic advisor to US President Barack Obama, speaking with CNN in an interview said, "S&P's track record has been terrible, and as we have seen this weekend, its a arithmetic is worse. So, there's nothing good to say about what they've done."
He added, "But that's not the large issue here. The large issue here is that the House majority played chicken with America's credit worthiness, and America's families are going to be the losers, losers in terms of higher interest rates on their mortgages, losers in terms of what this is going to mean for employment, that we've got critical economic problems."
Insisting that the US now needs to find a balanced approach to make its way out of the economic mess, Summers said, "The critical economic problem of slow growth and lack of jobs, the critical economic problem of a long-run budget situation that needs to be adjusted and needs to be adjusted in a rational way, and we have to find balanced approached going forward. Balanced approaches to focus on the jobs deficit."
Despite all the gloom surrounding the debt situation in the US economy, Summers remains confident that the debts will be paid of. He said, "Look S&P said to sell, Warren Buffett said to buy. That should tell you something about the quality of US bonds."
And added, "At the same time, this happened because S&P was seeing what most Americans are feeling, which is unhappiness with the solutions that are coming out of congress for critical economic problems."
It can be recalled that S & P on Aug 5, for the first time downgraded the US credit rating from AAA to AA+.