Anger turns to anxiety in debt crisis

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Terms of the deal to extend the U.S. government's borrowing authority and trim federal spending contributed to investor angst. Many economists suggest the debt-limit measure could even wind up making economic problems worse if belt-tightening spending cuts coincide with a new recession.

And the Standard and Poor's downgrade late Friday cast new doubts on the value of the U.S. debt-limit deal. The credit rating agency said it was cutting the country's top AAA rating by one notch to AA-plus because the deficit reduction plan passed by Congress did not go far enough to stabilize the country's debt situation.

As to that downgrade, economists suggested it might not have much actual impact, noting that the credit ratings of Japan, Canada and Australia had also been downgraded in recent years with few economic consequences.

And in the past few days, investors have been fleeing stock and commodity markets for the perceived safety of U.S. Treasury bonds and bills.

That's a dramatic about face, since just a few days ago, global investors were worried that a U.S. default on its debt would end the longstanding status of Treasurys as the world's safest-haven investments.

"Investors have voted and are saying the U.S. is going to pay them," Mark Zandi, chief economist of Moody's Analytics. Despite the S&P downgrade Friday night, "U.S. Treasurys are still the gold standard," he said.

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