Judge for yourself.  This is the actual language.
Standard And Poors Report.

Some highlights.  That I think represent the tone and bring out the points the media as usual is missing.

My take, S&P reduced the rating because:

1) Recent events in Washington have left S&P doubtful congress can act effectively to deal with the financial problems facing the country.

2) The recent agreement is not adequate.

3) The timing of the next election makes it unlikely a significant agreement will be reached, the debt issue will be worse and require tougher measures.

4) Political  leaders have shown no intention of tackling Medicare and Medicate or

other entitlements programs.

5) S&P takes no position of what mixture of revenue raising or spending cuts is appropriate.

From the report.

The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective,
and less predictable than what we previously believed.

The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year’s wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently.

Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures.

It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal  sustainability. Our opinion is that elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden in a manner consistent with a ‘AAA’ rating and with ‘AAA’ rated sovereign peers.

In our view, the difficulty in framing a consensus on fiscal policy weakens the government’s ability to manage public finances and diverts attention from the debate over how to achieve more balanced and dynamic economic growth in an era of fiscal stringency and private-sector deleveraging (ibid). A new political consensus might (or might not) emerge after the 2012 elections, but we believe that by then, the government debt burden will likely be higher, the needed medium-term fiscal adjustment potentially greater, and the inflection point on the U.S. population’s demographics and other age-related spending drivers closer at hand (see “Global Aging 2011: In The U.S., Going Gray Will Likely Cost Even More Green, Now,” June 21, 2011).

Standard & Poor’s takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.’s finances on a sustainable footing.  The act calls for as much as $2.4 trillion of reductions in expenditure growth over the 10 years through 2021. These cuts will be implemented in two steps: the $917 billion agreed to initially, followed by an additional $1.5 trillion that the newly formed Congressional Joint Select Committee on Deficit Reduction is supposed to recommend by November 2011. The act contains no measures to raise taxes or otherwise enhance revenues, though the committee could recommend them.

Change in Unemployment Rate By Country

By any measure this has been a hard and long recession, and many of us are not convinced it is over.  Particularly worrisome is the millions of men who have dropped off the face of employment statistics.  Men who have just disappeared.  No statistic the Federal Government keeps tracks them.  If they are working its in the cash underground or by barter or combination of or just wearing out the couch.  These men having exhausted their unemployment don’t even show in the state numbers.

Giving voice to this statistic is the Structural Unemployment number traditionally around 2%, representing the people who don’t work and aren’t looking for work, the long term unemployed.  The chart (Reuters) suggests this rate maybe more like 4.5% now twice the rate of any European country.

The share of American men aged 16 to 64 who are employed has fallen from nearly 85 percent in the early 1950s to less than 65 percent now.  This is a really big deal, millions of men have dropped out and are not participating in the American economy.  We have no experience with what the social ramifications will be, a huge rise in crime comes to mind.

Some estimates put every 1 in 5 young men out of work, and this does not include those in school, or who have part time jobs.  This is a critical time for those men, work habits are established and a career basis is formed.  The start of their life wealth is being seriously delayed, if it ever starts at all.

Chairman of the Texas Workforce Commission Tom Pauken writes:

One reason that men’s employment rate lags behind is that there has been negative growth in the types of jobs men historically have occupied. In the last 10 years, 5.5 million manufacturing jobs were lost. That’s one-third of our manufacturing base in an industry where men make up 70 percent of the workforce. In construction, where 87 percent of positions are filled by men, more than 1.4 million jobs went away during that time frame. Approximately 4.4 million jobs have been added in the education and health care sectors, but women dominate this growing field as they make up 77 percent of the work force.

Bringing manufacturing jobs home is more critical than ever, it’s a National Security issue.

Job Growth By State Since The "End" of the Reession

Regional and State Employment and Unemployment Summary (BLS.gov)

If you click on the graph to the right and expand or zoom in on Connecticut you can barely see a tiny bit of blue.  That blue represents job growth since the MAX jobs lost point during the 2007 Recession as of this past May 2011.  Note it’s the 2007 Recession and we are now obviously in 2011.  The top of the blue is the worst unemployment rate and the top of the red is where we are as of May this year.  Keep zooming in, I assure you there is SOME blue in the Connecticut bar, (yes a pun).

Also note only one state is worse in job growth.  Louisiana.

If you google.com “companies leaving Connecticut” it returns: 59,100,000 results in (0.10 seconds) including a link for this resource guide on everything you need to know, leavingconnecticut.com

To this I add, how could the housing market in Connecticut ever recover if we don’t improve our job growth?

Counting Ballots

The number of minivans in the school parking lot was a giveaway.  The budget passed 181 Yea, to 50 Nay (or something close to that).

No drama, no questions.  Just the check in and voting.

This was the third budget vote and essentially the same budget tax increase and spending wise.  The bottom line was the same for all three votes.

The 1st and 2nd differed by a line item providing legal fee relief to residents in the Sewer District.  And I’ll not explain that, it would take a book to fully explain the ins and outs.  The 2nd and 3rd budget “essentially” in Bill Black’s words, were the same.

A exit survey was prepared in the event the budget failed.

Your July 1st tax bill will show a 2.35% tax increase over last year.

$80 Billion in 8 Days.

Treasury’s release this afternoon of its Monthly Statement of Public Debt provides more insight into how much of those options Treasury has tapped so far. The following chart shows non-marketable securities held by the CSRDF each month since April of last year.

The G-fund was $73.3 billion as of May 31, down $56.0 billion from the end of April. As our next chart shows.

Zerohedge.com

Source: ShadowStats.com

Rapidly Approaching Category 5

http://www.nap.edu/catalog/12999.html

Executive Summary

A Few Factoids

Thirty years ago, ten percent of California’s general fund went to higher
education and three percent to prisons. Today, nearly eleven percent
goes to prisons and eight percent to higher education.1

China is now second in the world in its publication of biomedical
research articles, having recently surpassed Japan, the United Kingdom,
Germany, Italy, France, Canada and Spain.2

The United States now ranks 22nd among the world’s nations in the
density of broadband Internet penetration and 72nd in the density of
mobile telephony subscriptions.3

In 2009, 51 percent of United States patents were awarded to non-
United States companies.4

The World Economic Forum ranks the United States 48th in quality of
mathematics and science education.5

Of Wal-Mart’s 6,000 suppliers, 5,000 are in China.6

There are sixteen energy companies in the world with larger reserves
than the largest United States company.7

IBM’s once promising PC business is now owned by a Chinese
company.8

The legendary Bell Laboratories is now owned by a French company.9

Hon Hai Precision Industry Co. (computer manufacturing) employs
more people than the worldwide employment of Apple, Dell, Microsoft,
Intel and Sony combined.10

No new nuclear plants and no new petroleum refineries have been built
in the United States in a third of a century, a period characterized by
intermittent energy-related crises.11

Only four of the top ten companies receiving United States patents last
year were United States companies.12

United States consumers spend significantly more on potato chips than
the government devotes to energy R&D.13

The world’s largest airport is now in China.14

In 2000 the number of foreign students studying the physical sciences
and engineering in United States graduate schools for the first time
surpassed the number of United States students.15

Federal funding of research in the physical sciences as a fraction of GDP
fell by 54 percent in the 25 years after 1970. The decline in engineering
funding was 51 percent.16

GE has now located the majority of its R&D personnel outside the
United States.17

Manufacturing employment in the U.S. computer industry is now lower
than when the first personal computer was built in 1975.18

In the 2009 rankings of the Information Technology and Innovation
Foundation the U.S. was in sixth place in global innovation-based
competitiveness, but ranked 40th in the rate of change over the past
decade.19

China has now replaced the United States as the world’s number one
high-technology exporter.20

In 1998 China produced about 20,000 research articles, but by 2006
the output had reached 83,000 . . . overtaking Japan, Germany and the
U.K.21

Eight of the ten global companies with the largest R&D budgets have
established R&D facilities in China, India or both.22

During a recent period during which two high-rise buildings were constructed
in Los Angeles, over 5,000 were built in Shanghai.23

In a survey of global firms planning to build new R&D facilities, 77 percent
say they will build in China or India.24

China has a $196 billion positive trade balance. The United States’ balance
is negative $379 billion.25

Sixty-nine percent of United States public school students in fifth
through eighth grade are taught mathematics by a teacher without a
degree or certificate in mathematics.26

Ninety-three percent of United States public school students in fifth
through eighth grade are taught the physical sciences by a teacher
without a degree or certificate in the physical sciences.27

(editor: Any wonder that our kids are not getting turned on to math and science!)

Of the Big Three American automakers, one is now owned by a firm in
Italy (after having been previously sold by a German firm), and another
is 60 percent owned by the United States government.28

The United States ranks 27th among developed nations in the proportion
of college students receiving undergraduate degrees in science or
engineering.29

Forty-nine percent of United States adults do not know how long it
takes for the Earth to revolve around the Sun.30

The United States graduates more visual arts and performing arts
majors than engineers.31

The total annual federal investment in research in mathematics, the
physical sciences and engineering is now equal to the increase in United
States healthcare costs every nine weeks.32

Bethlehem Steel marked its 100th birthday by declaring bankruptcy.33

The United States ranks 20th in high school completion rate among
industrialized nations and 16th in college completion rate.34

In less than 15 years, China has moved from 14th place to second place
in published research articles (behind the United States).35

China’s real annual GDP growth over the past thirty years has been 10
percent.36

According to OECD data the United States ranks 24th among thirty
wealthy countries in life expectancy at birth.37

For the next 5-7 years the United States, due to budget limitations, will
only be able to send astronauts to the Space Station by purchasing rides
on Russian rockets.38

The average American K-12 student spends four hours a day in front of
a TV.39

China’s Tsinghua and Peking Universities are the two largest suppliers
of students who receive PhD’s—in the United States.40

Sixty-eight percent of U.S. state prison inmates are high school dropouts
or otherwise did not qualify for a diploma.41

The United States has fallen from first to eleventh place in the OECD in
the fraction 25-34 year olds that has graduated high school. The older
portion of the U.S. workforce ranks first among OECD populations of
the same age.42

When MIT put its course materials on the worldwide web, over half of
the users were outside the United States.43
Six of the ten best-selling vehicles in the United States are now foreign
models.44

Since 1995 the United States share of world shipments of photovoltaics
has fallen from over 40 percent to well under 10 percent—while the
overall market has grown by nearly a factor of one hundred.45

Among manufacturers of photovoltaics, wind turbines and advanced
batteries, the top ten global firms by market capitalization include two,
one and one United States firms, respectively. The other firms are from
China, Denmark, France, Germany, India, Spain, Taiwan and the U.K.46
An American company recently opened the world’s largest private solar
R&D facility . . . in Xian, China.47

By 2008, public spending in the United States on energy R&D had
declined to less than half what it was three decades ago in real purchasing
power. By 2005, private investment had declined to less than
one-third of the total.48

A single Japanese automobile model constitutes about half of the U.S.
hybrid market.49

Last year Mitsubishi introduced the world’s first mass-produced allelectric
car.50

A Japanese company produces over 75 percent of the world’s nickelmetal
hydride batteries used in vehicles.51

Japan has 1524 miles of high speed rail; France has 1163; and China
just passed 742 miles. The United States has 225. China has 5612 miles
now under construction and one plant produces 200 trains each year
capable of operating at 217 mph. The United States has none under
construction.52

Roughly half of America’s outstanding public debt is now foreignowned—
with China the largest holder.53

The increase in cost of higher education in America has substantially
surpassed the growth in family income in recent decades. United States
current and former students have amassed $633 billion in student loan
debt.54

There are 60 new nuclear power plants currently being built in the
world. One of these is in the United States.55

In 2008, 770,000 people worked in the United States correction sector,
a number which is projected to grow. During the same year there were
880,000 workers in the entire United States automobile manufacturing
sector.56

Between 1996 and 1999, 157 new drugs were approved in the United
States. In a corresponding period ten years later the number dropped
to 74.57

All the National Academies Gathering Storm committee’s recommendations
could have been fully implemented with the sum America spends
on cigarettes each year—with $60 billion left over.58

Youths between the ages of 8 and 18 average seven-and-a-half hours
a day in front of video games, television and computers—often
multi-tasking.59

In 2007 China became second only to the United States in the estimated
number of people engaged in scientific and engineering research and
development.60

In January 2010, China’s BGI made the biggest purchase of genome
sequencing equipment ever.61

In May 2010, a supercomputer produced in China was ranked the
world’s second-fastest.62

Almost one-third of U.S. manufacturing companies responding to
a recent survey say they are suffering from some level of skills
shortages.63

According to the ACT College Readiness report, 78 percent of high
school graduates did not meet the readiness benchmark levels for one
or more entry-level college courses in mathematics, science, reading
and English.64

Says the former President: “Thar be disshunfanized people up thar”. Through a translator the ex-President stated, “It’s a human right for all to express themselves through the ballot box, the fact that a bag of uncounted ballots was found is affront to Malloy’s civil rights as a Democrat. ”

The former President will be signing his latest book, “I am NOT the Worst President Anymore.”