The United States wouldn't enjoy "risk-free" top AAA credit rating any longer. Standard & Poor's decision, being questioned by many including the White House, to downgrade AAA rating to AA+ was based on an analysis which blew up U.S. deficits by $2 trillion.

S&P, one of the world's leading credit rating agencies, admitted to having made a mistake about deficits immediately after U.S. Treasury officials pointed out the same, but strangely chose to stick to the credit downgrade.

In its rationale for lowering the credit rating, S&P cited a "prolonged" political fight to raise the debt ceiling and "containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues."

S&P said it was "pessimistic" that the recent agreement could lead to a broader fiscal consolidation plan that would stabilize the government's debt dynamics "any time soon."

S&P is Ruining Reliability:

No one will forget the allegations credit rating agencies, including S&P, faced during the Subprime mortgage crisis. They came under harsh criticism for understating the risk involved with new, complex securities that fueled the United States housing bubble, such as mortgage-backed securities (MBS) and collateralized debt obligations (CDO).

"The three credit rating agencies were key enablers of the financial meltdown. The mortgage-related securities at the heart of the crisis could not have been marketed and sold without their seal of approval. Investors relied on them, often blindly. In some cases, they were obligated to use them, or regulatory capital standards were hinged on them. This crisis could not have happened without the rating agencies. Their ratings helped the market soar and their downgrades through 2007 and 2008 wreaked havoc across markets and firms," the Financial Crisis Inquiry Commission reported in Jan. 2011.

In a complaint against S&P filed in 2008 by the State of Connecticut, the latter said, "All three credit rating agencies systematically and intentionally gave lower credit ratings to bonds issued by states, municipalities and other public entities as compared to corporate and other forms of debt with similar or even worse rates of default, Blumenthal alleges" Richard Blumenthal, Connecticut Attorney General, July 30, 2008 (Blumenthal is governor of Connecticut), Economic Populist reported.

France still enjoys AAA rating even though it has a much higher debt per capita ratio than the U.S, while Japan's credit rating was downgraded several years ago, when the interest rates its government paid on bonds was already extremely low, and they've generally trended lower in the years since, says columnist Daniel Gross in his article.

So, should we brand S&P as a leading credit rating further? For committing blunders in rating analysis which can potentially dovetail the economy, for not budging even after admitting an error, and above all, for validating it withapparently fact-free reasons?

Hints of political play:

Debate on S&P's decision will go on with or without scrutiny, but two parties will definitely gain from the credit downgrade. Republicans and Tea Party will never let go of the situation in a year ahead of the presidential elections. While they gear up to point out Obama's failure more frequently now, it does not weaken the fact that he too was responsible for political uncertainty prior to debt ceiling raise.

However, it is time to look for other avenues of rating the economy.