{"id":176441,"date":"2010-01-13T15:49:00","date_gmt":"2010-01-13T20:49:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/california-downgrades-california-to-third-world-country-status-2010-1"},"modified":"2010-01-13T15:49:00","modified_gmt":"2010-01-13T20:49:00","slug":"sp-downgrades-california-to-third-world-country-status","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/176441","title":{"rendered":"S&P Downgrades California To Third World Country Status"},"content":{"rendered":"

\"thehills<\/p>\n

Ok, S&P actually downgraded California to A-. And since developing countries have some of the best balance sheets around, maybe the title is especially unfair to those countries.<\/p>\n

The reason?<\/p>\n

The budget situation remains horrible.<\/p>\n

Dow Jones<\/a>:<\/p>\n

Due to uncertain assumptions of major portions of the budget, S&P said the state’s credit is more susceptible to adverse economic developments.<\/p>\n

As a result, it lowered its ratings on the state’s $63.9 billion of general obligation debt by one notch to A-, which is four notches into investment grade. That is the lowest such rating for any state in the U.S. California also has a negative outlook, meaning future downgrades aren’t out of the question.<\/p>\n

And while the budget proposal includes efforts to make some structural improvement to the state’s projected fiscal imbalance, S&P said it does so by assuming what it considers to be “significant increases in federal reimbursements and funding and reduced federal spending mandates–provisions over which the state lacks singular or direct authority.” It also requires voter approval of two ballot measures to allow the redirection of $1 billion in funds presently earmarked pursuant to two prior election results.<\/p>\n

Read the whole story — ><\/a><\/p>\n

Bonus:<\/strong> Now see the real state of collapsing state revenues — ><\/strong><\/a><\/p>\n

Join the conversation about this story »<\/a><\/p>\n

See Also:<\/b><\/p>\n