Haslam not 'overly concerned' about possible credit downgrade

Wednesday, July 20, 2011 at 1:53pm

Gov. Bill Haslam said Wednesday he is “concerned about it but not overly” that the U.S. debt crisis has jeopardized Tennessee’s top-rated AAA credit rating.

Moody’s Investors Services told Tennessee and four other states this week that they face downgrades because of their dependence on federal revenue.

“Should the U.S. government’s rating be downgraded to Aa1 or lower, these five states’ ratings would likely be downgraded as well,” the bond-rating agency said.

Maryland, New Mexico, South Carolina and Virginia also were placed on the list for possible downgrades in credit ratings. All now enjoy AAA ratings. Borrowing costs would increase if their ratings are lowered. Ten other states have the highest bond ratings.

A week ago, Moody’s put the U.S. government bond rating on review because of the “rising possibility” that the nation’s debt limit will not be raised on a timely basis.

Virginia Gov. Bob McDonnell said Tuesday he was “furious” about Moody’s warning and called it “a national embarrassment” that the federal government is two weeks away from defaulting on its debts.

Haslam was more guarded in his comments to reporters.

“What they said is if the federal government defaults on their debt, that leaves states exposed and it does,” Haslam said. “Regardless, the state of Tennessee will be in good shape. I think we’re in maybe one of the two or three best financial states of any state out there. But that impact on our debt would cause some increased interest costs or could in some instances. So we’re concerned about it but not overly because of the financial condition we’re in.”

11 Comments on this post:

By: bfra on 7/20/11 at 2:41

Whiy don't they cut those obscene salaries the political bigwigs draw & cut out all the perks they receive? That would knock a giganic hole in the deficet. Start with the top & go down, not with the middle & go down.

By: tn.native on 7/20/11 at 3:18

It's the politicians who have the entitlements. The system has been turned upside down. Instead of politicians "serving" the people they end up serving themselves and staying in office as long as possible. That's why huge sums of money are spent on getting elected and staying put. Term limits and a salary should not be padded with an unknown amount of kickbacks. It's in Washington and in the state. Not a pretty side of democracy but one that seems to give politicians power to make the laws that tilt in their favor. Get out of the middle east and all the states will have more for education and health care. That makes fewer of our young men and women dieing and more opportunities at home.

By: ejray59 on 7/21/11 at 6:46

I agree with term limits. Hhow about all politicians, regardless of position, have one (1) six (6) year term limit? They can alternate every two (2) years having an election and that way everyone gets what they want - except politicians who get 6 years to hold ANY office. Though the levels are exempt: local city, county state and then federal. So a career politician can be in an elected office NO MORE than 24 years. Which is a H3LL of a long time for any type job.

By: Captain Nemo on 7/21/11 at 7:16

What I have seen in the pass 30 years, for some politicians that one week is to long a term. I would hate to think what kind of damage they would do if they knew they only had 6 yrs.

By: gdiafante on 7/21/11 at 7:16

Haslam should be concerned as Tennessee, much to the chagrin of the teatards, is a member of the United States, and even though they (TN) may have their house in order (questionable), the credit rating has global implications that do affect this state.

The more Haslam opens his mouth, the more I'm convinced he's not qualified to be Governor.

By: gdiafante on 7/21/11 at 7:18

I'm not convinced that term limits would be effective. That only means that these incompetent legislators have less time to do nothing. I think a better solution would be to elect quality candidates.

Given the field, it isn't likely.

By: american1974 on 7/21/11 at 8:16

If every governor, senator, congressman worked for free, that would not make a dent in the national debt. The biggest issue is Medicare that is about 10% of our GDP. Social Security is somewhat flat, but not looking good for the future. We have plenty of money to pay our debt, just not the thousands of unwanted departments and wasteful spending.
Outside of the military for world wars, the states are much worse off with the federal government than without. At least the size it has become. I'm afraid the people and the states will eventually explode and pull back. Everyone thinks it can't happen, but history has proven otherwise. Russia thought it could never happen, but eventually the people were fed up with all of the control and the government holding them back. Estonia is doing great now. They have a flat tax that shrinks every year, their GDP is growing with a free market, and quality of life is expected to catch up with Sweden if not pass it.
I don't think most people reading this realize that the government runs out of our tax money fairly early and the rest comes from printing and the Federal Reserve. Of course printing money for Government departments, projects, etc makes the dollar worth less and less. It's a way for the government to spend at will without passing a bill for new taxes.
Where does the value go?? It goes to the people closest to the water spout. Big banks , government projects. When it's first printed it is worth more than by the time it makes it to the common man. Inflation is not really prices rising. It's the value of the dollar shrinking from printing money. Though it appears prices are rising , because it takes more dollars to buy the same thing a year ago.
There is a reason Andrew Jackson destroyed the Central bank. The Federal Reserve is a bank cartel that was created to protect the big banks and for the people at the top to remain in power. Inflation is a hidden tax and hurts the poor more than anyone.
End the Federal Reserve and you will end most of the utopian spending and most of the problems.

By: Radix on 7/21/11 at 8:36

Another good example why the Tea Party is right, and we should reduce our dependence on Federal Government as much as possible.

McDonnell hit the nail on the head. The nation debt is a complete embarrassment and total evidence of Obama's failure to lead. When he tripled the deficit from the Bush years, did he just assume that congress would toss him the credit card? They guy spent our money before he had it, and is now using that as leverage to try to confiscate it.

Great post American 1974! Andrew Jackson was the only US President to pay off the National Debt.

Gdiafante, here's some trivia, which "Teatard" member of congress said this:

"The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies.
...

And the cost of our debt is one of the fastest growing expenses in the Federal budget. This rising debt is a hidden domestic enemy, robbing our cities and States of critical investments in infrastructure like bridges, ports, and levees; robbing our families and our children of critical investments in education and health care reform; robbing our seniors of the retirement and health security they have counted on.

Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities."

Actually it was BARACK OBAMA in 2006

By: Radix on 7/21/11 at 9:02

Tennessee's debt clock:

http://www.usdebtclock.org/state-debt-clocks/state-of-tennessee-debt-clock.html

By: Radix on 7/21/11 at 9:03

McDonnell in Virginia is running s surplus. Why are they on the list?

By: pswindle on 7/21/11 at 11:18

What have we elected as TN Governor?