The S&P might just have catastrophically damaged its credibility. The US Treasury has just issued this rebuttal of S&P's downgrade of US debt. As if the ratings agencies did not have enough trouble in Europe, they have now given the US government justifiable cause to shake up the present ratings system. This basic error in its calculations appears irresponsibly casual and unprofessional, at the worst possible time. The scapegoating of the ratings agencies in Europe may be ludicrous, but it's a fair bet that EU politicians are going to make capital out of this. If S&P's downgrade was motivated by a desire to make up for its shortcomings during the credit bubble, it has seriously miscalculated.
Has Standard & Poor’s Got Its US Numbers Wrong?