No Dealing On The Debt Ceiling, Part 17

And today the Republican refusal to raise the debt ceiling just got real.  First, Chinese bond rating agency Dagong dropped this bombshell:

A CHINESE ratings house has accused the United States of defaulting on its massive debt, state media said on Friday, a day after Beijing urged Washington to put its fiscal house in order.


'In our opinion, the United States has already been defaulting,' Guan Jianzhong, president of Dagong Global Credit Rating Co Ltd, the only Chinese agency that gives sovereign ratings, was quoted by the Global Times saying.

Washington had already defaulted on its loans by allowing the dollar to weaken against other currencies - eroding the wealth of creditors including China, Mr Guan said.

Second, German ratings firm Feri became the first agency to officially drop the US from AAA to AA status.

The Bad Homburg Feri EuroRating & Research AG downgraded the first credit rating agency's credit rating for the United States from AAA to AA. Feri analysts justify the downgrade by the continuing deterioration of the creditworthiness of the country due to high public debt, inadequate fiscal measures, and weaker growth prospects.

"The U.S. government has fought the effects of the financial market crisis primarily by an increase in government debt. We do not see that there is sufficient attention being paid to other measures, "said Dr. Tobias Schmidt, CEO of Feri Rating & Research AG. "Our rating system shows a deterioration in economic health, so the downgrading of the credit ratings of U.S. is warranted."

For the third consecutive year the deficit of the United States is in double digit percentages relative to gross domestic product (GDP). "Deficits of such magnitude are not a sustainable fiscal policy. We would reconsider the rating when the U.S. government creates a long-term sustainable budget," said Schmidt. 

Things just got ugly, folks.  If foreign credit agencies are staring to seriously dump on US treasuries and the Republicans refuse to raise the debt ceiling, people are already starting to bet on Washington going over the cliff and taking us with it.

Paging the financial Powers That Be:  the Republicans are starting to cost you money.  Might want to do something about them, thanks.