martha: key credit rating agencies are now saying that $85 billion in automatic spending cuts is simply not enough to prevent them from downgrading u.s. credit. they say the u.s. government would have to do a lot more to reduce the deficit if we want to avoid having our credit rating come down again. wow! steve hayes joins me now, senior writer at weekly standard and fox news contributor. steve, welcome. good morning, martha. martha: we were told this would be devastating affect to the economy if the sequester kicked in. now we re hearing from ratings agencies will not cut it. it is not enough in fact. right. martha, you and i and bill talked about this so many times before. this is something of an obsession of mine. the real problem, the real issue is our debt trajectory as a country. are we actually changing the trajectory of our debt so
charge of making sure that the value of investments is at least reasonably related to the price that is put on them. in fact, not just someone, there is a whole industry there is a whole part of the financial sector whose job it is to do that. they rate financial products. they give them ratings to help guide consumers as to what they are worth. they issue ratings. they are the ratings agencies. and they are central to the reason wall street cratered. the american economy didn t crater like it had been hit by an asteroid because people were investing in companies that didn t pan out. it wasn t that kind of a collapse. it wasn t that there was a war somewhere and suddenly nobody could get any oil or something. that was not why we had a financial collapse. we had a financial collapse because of fakery. we had a financial collapse because people were buying and selling things at prices that were totally, totally fake. and the people who were selling them knew it. it was a con game that ev
they give them ratings to help guide consumers as to what they are worth. they issue ratings. they are the ratings agencies. and they are central to the reason wall street cratered. the american economy didn t crater like it had been hit by an asteroid because people were investing in companies that didn t pan out. it wasn t that kind of a collapse. it wasn t that there was a war somewhere and suddenly nobody could get any oil or something. that was not why we had a financial collapse. we had a financial collapse because of fake erie. we had a financial collapse because people were buying and selling things at prices that were totally, totally fake. and the people who were selling them knew it. it was a con game that everybody was in on. and when everybody finally had to acknowledge that the actual value of these things that they had been trading at these inflated prices was not the value they had been trading them at, everybody finely had to admit what the real value was of these thin
they give them ratings to help guide consumers as to what they are worth. they issue ratings. they are the ratings agencies. and they are central to the reason wall street cratered. the american economy didn t crater like it had been hit by an asteroid because people were investing in companies that didn t pan out. it wasn t that kind of a collapse. it wasn t that there was a war somewhere and suddenly nobody
a bit of a barometer, an indicator that the economy is having some problems that they are not doing as well as they otherwise might. but in the at the end of the day, it s not something for a depositor or someone taking out a loan to worry about. investors need to pay attention to it because it does effect the cost of money to those banks but only at the margin. bill: those banks will have to pay more to get money in or something like that. that s right. it s suggests that they are riskier when things are riskier. you have to pay more for the privilege. that s exactly what s going on. bill: are these banks being mismanaged, badly run? is that why they are downgraded. the great irony here is bill these banks are better managed today than they were. bill: why are they being downgraded. he they are ratings agencies. they are trying to catch up with what they missed four years ago. in part that s exactly what it is. bill: it really doesn t matter. it s just a paper thing.