The President of the United States of America made history on his watch, once again, yesterday.  And not in a good way.

Standard & Poor’s announced Friday night that it has downgraded the U.S. credit rating for the first time in the history of our country, lowering our rating from AAA to AA.

Per S&P, “political brinkmanship” in the debate over the debt had made the U.S. government’s ability to manage its finances “less stable, less effective and less predictable.” The company also explained that the bipartisan agreement reached this week to find at least $2.1 trillion in budget savings “fell short” of what was necessary to tame the nation’s debt over time and predicted that leaders would not be likely to achieve more savings in the future.

David Beers, head of S&P’s government debt rating unit said:

It’s always possible the rating will come back, but we don’t think it’s coming back anytime soon.

S&P came to their decision after a day of frantic negotiations with the Obama Administration.

Treasury Department officials slammed s&P during the negotiations. Their argument remains that the companyss political analysis was flawed and that it had made a numerical error in a draft of its downgrade report that overstated the deficit over 10 years by $2 trillion. Treasury Officials had reviewed the draft earlier in the day.

A pinheaded Treasury spokesperson proclaimed defensively Friday night:

A judgment flawed by a $2 trillion error speaks for itself.

So does a country being downgraded to a AA Credit Rating, Skippy.

The downgrade to AA+ will send the already unstable global financial markets reeling, after a wild week in which panic over a worsening debt crisis in Europe and a faltering economy in the United States dropped America’s Stock Market like a stone, causing a loss of over 500 points on Thursday.

The AAA rating by Standard and Poors has made the U.S. Treasury bond one of the world’s safest investments

Through our history, the rating has allowed the leaders of our country to borrow at extraordinarily cheap rates to finance our government’s operations, including two wars and Social Security.

Treasury bonds have also been a fortress wall against the crushing economic tide of the last few years (say, since this Congress took over in 2007).

Before the Obama Administration lost it for us, America has had a AAA rating for 70 years.

According to those in the know, this downgrade could push up borrowing costs for the U.S. government, which would cost you and me, gentle reader, an additional tens of billions of dollars in taxes a year. It may also drive up interest rates for consumers and companies seeking mortgages, credit cards and business loans.

This downgrade to AA could also effect states and localities, including just about all of those in the Washington metro area. These local and state governments could lose their AAA credit ratings as well, which could raise the cost of borrowing for schools, roads and parks.

We’ll find out just how bad this downgrade is on Sunday night, when Asian markets open. However, the full effects of this financial body slam by S&P may not be felt for months. for months. The fact is, the initial effect on the markets may be minor, as they have been anticipating an S&P downgrade for weeks.

The following explanation is available in a pdf on standardandpoors.com:

We have lowered our long-term sovereign credit rating on the United States of America to ‘AA+’ from ‘AAA’ and affirmed the ‘A-1+’ short-term rating.

We have also removed both the short- and long-term ratings from CreditWatch negative.

The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.

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.

Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government’s debt dynamics anytime soon.

The outlook on the long-term rating is negative. We could lower the long-term rating to ‘AA’ within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.

America’s imperious Administration insisted that this would never happen.

In fact, Treasury Secretary, “Turbo Tax” Tim Geithner, said last Tuesday there was “no risk” the U.S. will lose its top credit rating amid a new analysis that revised its outlook on American debt to “negative.”

Per thehillcom:

Geithner took to the airwaves of financial news networks to push back against a report Monday by Standard & Poor’s that lowered its outlook on U.S. debt to “negative,” reflecting political uncertainty over whether lawmakers will reach an agreement to address long-term debt.

There is no chance that the U.S. will lose its top credit rating, Geithner said, forcefully disputing the notion that S&P or other ratings services might downgrade U.S. bonds from their current AAA rating.

“No risk of that, no risk,” Geithner said on the Fox Business Network.

“Washington is a hard place to read. And it’s hard for people to look past the political rhetoric and try to understand whether the leadership of Washington is going to take the tough steps necessary to get ahead of this problem,” the Treasury secretary explained. “I think the prospects for a bipartisan agreement are better than they’ve been in a long period of time. Of course, we have to turn that into action.”

Well, gosh.  I feel better now.  Hey, does anyone have a million dollars they can loan me?  I need to go buy a loaf of bread as we will soon be Zimbabwe West.