By Carlie Kollath/NEMS Daily Journal
TUPELO – A veteran financial adviser deemed Standard & Poor’s downgrade of the U.S. credit rating as “inappropriate.”
Scott Reed, of Hardy-Reed Capital Advisors in Tupelo, also said the credit rating agency “overstepped” in its decision.
S&P on Friday knocked the AAA rating of long-term U.S. government debt down a notch lower to AA-plus.
“The downgrade was inappropriate,” Reed said. “We have the ability to print our own money.”
Of course, he said, that leads to inflationary concerns, but it means the U.S. wouldn’t default, as opposed to Greece, which uses the Euro.
Financial experts were mixed about what the downgrade would mean for consumers. Some speculated it could mean higher rates for car, home and education loans.
“I don’t think it’s going to mean very much,” Reed said, adding that the two other ratings agencies – Fitch’s and Moody’s – maintained their AAA rating of the U.S. “AA is still a heck of a good rating.”
He cited S&P as the problem with the rating, not the U.S., saying the agency was too liberal with its top ratings before the economic downturn. The agency got burned, and now S&P is going the other way, Reed said.
But the ratings downgrade of U.S. long-term debt should be a message to Washington, he added.
“It should be a wake-up call to Congress that nobody likes what they are doing right now,” he said. “I’ve never seen people as sick with the political posturing as they are now.”