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The S&P downgrade came at the end of a week where fears over Europe’s debt crisis and a bleak outlook for the U.S. economy roiled global stock markets.
S&P said it dropped the United States’ AAA rating one level to AA+ over concerns that the country’s plan to lower deficits does not go far enough.
China, responding to the ratings agency’s downgrade, had harsh words for the U.S. government, saying that Washington must “live within its means.”
South Korea’s government said it will closely follow market reaction to the downgrade, with senior finance and banking officials meeting Sunday to discuss potential steps to limit the spread of market uncertainty, the Yonhap news agency reports.
In Australia, Prime Minister Julia Gillard urged calm over the S&P downgrade, pointing out that "the other two major ratings agencies, Moody's and Fitch, continue to have the American economy rated at AAA," CNN reports.
Canadian Finance Minister Jim Flaherty said that while Canada "is not an island," noting its close relationship with the United States, the country is still "well-positioned to face global headwinds."
In Europe, where many top leaders are on their summer vacations, immediate reaction was limited.
However, France's Nicolas Sarkozy reportedly interrupted his holiday Friday to speak with Angela Merkel and Spanish counterpart Jose Luis Rodriguez Zapatero, amid concerns that the euro zone's debt crisis might spread to Spain or Italy.
In the United States, Warren Buffett expressed disbelief about the ratings agency’s downgrade, telling Fox Business News that S&P’s downgrade “doesn’t make sense,” and he was still confident in the quality of the United States’ credit.
Mitt Romney said in a statement that “Standard & Poor’s rating downgrade is a deeply troubling indicator of our country’s decline under President Obama. His failed policies have led to high unemployment, skyrocketing deficits, and now, the unprecedented loss of our nation’s prized AAA credit rating.”
But Senate Majority Leader Harry Reid said the downgrade "shows why leaders should appoint members who will approach the committee’s work with an open mind — instead of hardliners who have already ruled out the balanced approach that the markets and rating agencies like S&P are demanding.”
Even Snoop Dogg reacted to the S&P downgrade, according to the Atlantic blog, posting on Twitter: "US Economy downgraded #getyomoneyright".