Home Budget, Economy Virginia’s AAA Bond Rating In Jeopardy Thanks to Can’tor and Company?

Virginia’s AAA Bond Rating In Jeopardy Thanks to Can’tor and Company?

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(UPDATE: McDonnell throw a hissy fit, but would be much better served by picking up the phone and telling Eric Can’tor to do his freakin’ job!!! – promoted by lowkell)

The negative consequences of the wild budgetary irresponsibility of Teapublicans like Eric Can’tor continue to pile up. The latest? Needless to say, this is not good:

Moody’s Investors Service has placed on review for possible downgrade the Aaa ratings of the states of Maryland, New Mexico, South Carolina, Tennessee, and the Commonwealth of Virginia. In connection with Moody’s July 13 action placing the Aaa government bond rating of the United States on review for downgrade, Moody’s announced that it would assess the ratings of Aaa-rated states to gauge their sensitivity to sovereign risk. The review actions affect a combined $24 billion of general obligations and related debt.

Should the U.S. government’s rating be downgraded to Aa1 or lower, these five states’ ratings would likely be downgraded as well. Moody’s will review the ratings of the five states on a case-by-case basis and announce any rating actions within seven to ten days following a sovereign action.

Specifically, with regard to Virginia, Moody’s cites several factors, including two “above averages” that really jump out at you: 1) “Federal procurement contracts as a percentage of state gross domestic product;” and 2) “Federal employees as a percentage of the state’s total employment.” The reason these two particularly jump out is that they totally belie the b.s. we hear so frequently from Virginia Republican’ts like Bob McDonnell, who attribute all good things in Virginia to the Holy Private Sector, and all bad things to the Evil Government, while of course totally ignoring the gigantic elephant in the room  — that Virginia is heavily, extensively, whatever other adverb you want to use, reliant on the Federal government for its prosperity. Take away the Pentagon, federal workers, federal contractors, the military-industrial complex, etc., and what would Virginia be? West Virginia, maybe? Of course, you’ll NEVER hear that from right-wing ideologues like Bob McDonnell and Eric Can’tor, but facts are stubborn things…

One last point for all those Virginia Republicans seemingly hell-bent on preventing the United States of America from fulfilling its obligations to creditors: while you’re destroying our country, just keep in mind that you’ll also be destroying our state as well. Of course, if these guys don’t care about the country, I suppose they wouldn’t care that much about Virginia either, but they’re not the brightest bulbs, so you never know.

P.S. Tim Kaine’s statement is on the “flip.” In short, Kaine urges “all those who seek to serve Virginia in the United States Senate to join me in demanding that Washington set aside political gamesmanship and vote to protect the U.S.’s credit rating by raising the debt ceiling and fulfilling our obligations without further delay.” I couldn’t agree more.

KAINE STATEMENT ON REPORT THAT MOODY’S WILL REVIEW VIRGINIA’S CREDIT RATING

RICHMOND – In response to news today that Moody’s may downgrade Virginia’s AAA credit rating if Congress fails to reach an agreement to raise the debt ceiling, Governor Tim Kaine released the following statement:

“As Governor, I protected Virginia’s AAA rating during the worst economic period in 70 years.  It’s deeply disappointing to see that partisan posturing in Washington is now jeopardizing not only our nation’s good standing, but also Virginia’s.  A downgrade in our credit rating would have lasting financial implications by forcing the Commonwealth to pay higher interest rates for years to come.

“I’ve long said that using a threat of default as a negotiating tactic is dangerous and irresponsible behavior.  I urge all those who seek to serve Virginia in the United States Senate to join me in demanding that Washington set aside political gamesmanship and vote to protect the U.S.’s credit rating by raising the debt ceiling and fulfilling our obligations without further delay.

  • NOVA expat

    There is much crowing by Republicans in Richmond about the importance of maintaining Virginia’s AAA bond rating.  There must be hundreds and hundreds of quotes from Republicans over the years where they’ve indicated how crucial it is that we maintain the AAA bond rating, often times at the expense of funding much-needed other priorities.  

    This presents a huge opportunity for our House and Senate candidates in the Fall to put their Republican opponents on the spot – do they support raising the debt limit or do they want to endanger our AAA rating.  

    It’s not just a rhetorical matter either; a lowering of our rating would cost us millions and millions of dollars in increased interest whenever we issue new bonds (like McD’s big transportation solution this past session), as well as potentially increase the interest we have to pay on bonds already issued.  That would apply to our localities as well, since their bond spending is underwritten by the Commonwealth’s good credit (I believe).  The impact could actually be even greater there.  

    Let’s hope our House and Senate candidates really stick it to their R opponents on this issue.  And that it doesn’t come to fruition, of course.

  • Elaine in Roanoke

    It should have been obvious to any Virginia political figure, regardless of party, that this state is in willing thrall to the federal government. Northern Virginia contains hundreds of thousands of federal employees. They have made that area the most affluent of the state. Tidewater Virginia is loaded with military installations that are the foundation of that area’s economy. We Virginians get back from the federal government $1.40 for every $1 we send to Washington. Yet…far too many people of the state buy into the myth of the big bad federal government. Oh, please, spare me. It’s way past time to bury the hatred of the feds partially bred by the Civil War and inchoate racism and just thank our lucky stars that we are located so close to the nation’s capital.

    Yet…we have to put up with Ken Kookinelli drumming up bogus suits against the feds, while McMediocre touts a non-existent “surplus” he partially created with that hated stimulus money.

  • NotJohnSMosby

    10th amendment……..state’s rights……nullification……socialism……

    You mean that the economic health of Virginia is connected to the economic health of the United States?  Did someone tell the teabaggers this?  

  • truthteller

    Rather than blaming POTUS he needs to look at the extremists in his own party who purported to claim that it was no big shakes if we defaulted in order to force thru their job killing budget cuts. Quit the tempertantrum Bob and put responsibility in the lap of your compatriots who actually deserve blame….