I'm not really surprised about our debt downgrade. The bill that was recently passed is pretty deceptive, more to follow on that later.

The sad part about this is that we have had this great rating since 1941, when it was first awarded to the US.

Enough talk... it finally happened. Standard & Poors took the first move and lowered the United States Credit Rating at 7:33 PM Friday, August 5, 2011 Eastern Daylight Time. Will Moody's and Fitch follow? Is this the fall of Rome...?

(Reuters) - The United States lost its top-notch AAA credit rating from Standard & Poor's on Friday in an unprecedented reversal of fortune for the world's largest economy.
S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about the government's budget deficits and rising debt burden. The move is likely to raise borrowing costs eventually for the American government, companies and consumers. The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics," S&P said in a statement. The decision follows a bitter political battle in Congress over cutting spending and raising taxes to reduce the government's debt burden and allow its statutory borrowing limit to be raised. On August 2 President Barack Obama signed legislation designed to reduce the fiscal deficit by $2.1 trillion over 10 years. But that was well short of the $4 trillion in savings S&P had called for as a good "down payment" on fixing America's finances. The political gridlock in Washington and the failure to seriously address U.S. long-term fiscal problems came against the backdrop of slowing U.S. economic growth and led to the worst week in the U.S. stock market in two years this week. The S&P 500 stock index fell 10.8 percent in the past 10 trading days on concerns that the U.S. economy may head into another recession and because the European debt crisis has been growing worse as it spreads to Italy.

(Additional reporting by Daniel Bases; Editing by Jan Paschal)

As an aside... the question was asked? Is this the end of the two party system since it is not working...? Another report from Reuters...

Bernd Debusmann is a Reuters columnist. The opinions expressed are his own. Confidence in the U.S. Congress is at a historic low, more than half of Americans think that the Republican and Democratic parties are doing such a bad job that a third party is needed, and the word “dysfunction” has been common currency in the drawn-out debate over the national debt. Does this mean the bells are tolling for the Republican-Democratic duopoly which has dominated American political life for more than 150 years? The answer is yes for a budding political force that aims to get the millions of voters who are disaffected by the present system to bypass the traditional selection of presidential candidates through primary elections.

The rest of the story is available at Reuters.