Would a Credit Downgrade Matter?

  • By DAVID WESSEL

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BY DAVID WESSEL

A prediction, widely shared in Washington and on Wall Street: One month from now, Congress will have lifted the federal debt ceiling, the U.S. government will be paying its bills, the president will have signed a convoluted deficit-reduction law that defers decisions on benefits and taxes—and the U.S. will have lost its AAA credit rating.

A downgrade of the U.S. to AA by Standard & Poor's—putting the U.S. in the company of Slovenia, among others—is not good. Full stop.

But how much will it really matter?

Is S&P;'s opinion akin to sports columnists writing about the World Series? (Entertaining, but ...

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