This is from S&P's historic downgrade of the U.S. credit rating on Aug. 5, 2011:
More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.
At the time, one could argue that 2011 was just a blip, that there was a Tea Party "fever" caused by the horrible economy, and the exploding debt, and the unique political situation.
But since then we've seen a broadly improving economy, a sharply improving fiscal picture, and the re-election of Obama ... and we're still in the same political situation. Some D.C. pundits would argue that deal prospects are even worse in 2013 than they were in 2011, which is astounding for anyone who paid close attention to the scene then.
So S&P's assessment that the effectiveness, stability, and predictability of U.S. policy-making and institutions had weakened quite a bit, and deserved to play a role in the downgrade was quite astute.
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