via WSJ
S&P Global Ratings jolted markets nearly 15 years ago when it stripped the U.S. of its triple-A credit rating, citing mounting debts and political discord.
Moritz Kraemer was an executive in S&P’s sovereign-bond unit when it cut the U.S.’s rating, then others including France, Austria and eventually the U.K. Now an economist for German bank LBBW, he says the dysfunction in Washington has only worsened.
We asked Kraemer what he thinks about the U.S.’s creditworthiness now:
WSJ: You were at S&P when the firm downgraded the U.S. in 2011. How big of a factor was governance then?
Kraemer: Governance and institutional quality was the key driver of the downgrade. This was the time of the Tea Party movement. When it started, the two parties drifted apart and it became harder to find compromise, and this came to a dramatic climax around July and August of 2011 when the U.S. was close to technical default because of political bickering and maneuvering in regards to raising the debt ceiling…. It was, at the time, our opinion this was no way to run a country, let alone a triple-A.