Bush tax cuts
The phrase Bush tax cuts refers to changes to the United States tax code passed during the presidency of George W. Bush and extended during the presidency of Barack Obama, through: Economic Growth and Tax Relief Reconciliation Act of 2001 Jobs and Growth Tax Relief Reconciliation Act of 2003 Tax Relief, Unemployment Insurance Reauthorization, Job Creation Act of 2010 American Taxpayer Relief Act of 2012 While each act has its own legislative history and effect on the tax code, the JGTRRA amplified and accelerated aspects of the EGTRRA. Since 2003, the two acts have been spoken of together in terms of analyzing their effect on the U. S. economy and population and in discussing their political ramifications. Both laws were passed using controversial Congressional reconciliation procedures; the Bush tax cuts had sunset provisions that made them expire at the end of 2010, since otherwise they would fall under the Byrd Rule. Whether to renew the lowered rates, how, became the subject of extended political debate, resolved during the presidency of Barack Obama by a two-year extension, part of a larger tax and economic package, the Tax Relief, Unemployment Insurance Reauthorization, Job Creation Act of 2010.
In 2012, during the fiscal cliff, the tax cuts were made permanent for single people earning less than $400,000 per year and couples making less than $450,000 per year, eliminated for everyone else, under the American Taxpayer Relief Act of 2012. Before the tax cuts, the highest marginal income tax rate was 39.6 percent. After the cuts, the highest rate was 35 percent. Once the cuts were eliminated for high income levels, the top income tax rate returned to 39.6 percent. The 2001 act and the 2003 act lowered the marginal tax rates for nearly all U. S. taxpayers. One byproduct of this tax rate reduction was that it brought to prominence a lesser known provision of the U. S. Internal Revenue Code, the Alternative Minimum Tax; the AMT was designed as a way of making sure that wealthy taxpayers could not take advantage of "too many" tax incentives and reduce their tax obligation by too much. It is a parallel system of calculating a taxpayer's tax liability; however the applicable AMT rates were not adjusted to match the lowered rates of the 2001 and 2003 acts, causing many more people to face higher taxes.
This reduced the benefit of the two acts for many upper-middle income earners those with deductions for state and local income taxes and property taxes. The AMT exemption level aspects of the 2001 and 2003 tax cuts, as well as the sunsetting year of capital gains and dividends, were among the tweaks made to the tax code in the Tax Increase Prevention and Reconciliation Act of 2005; the non-partisan Congressional Budget Office has reported that the Bush tax cuts did not pay for themselves and represented a sizable decline in revenue for the Treasury: The CBO estimated in June 2012 that the Bush tax cuts of 2001 and 2003 added $1.5 trillion total to the debt over the 2002–2011 decade, excluding interest. The CBO estimated in January 2009 that the Bush tax cuts would add $3.0 trillion to the debt over the 2010–2019 decade if extended at all income levels, including interest. The CBO estimated in January 2009 that extending the Bush tax cuts at all income levels over the 2011–2019 period would increase the annual deficit by an average of 1.7% GDP, reaching 2.0% GDP in 2018 and 2019.
There was and is considerable controversy over who benefited from the tax cuts and whether or not they have been effective in spurring sufficient growth. Supporters of the proposal and proponents of lower taxes say that the tax cuts increased the pace of economic recovery and job creation. Further, proponents of the cuts asserted that lowering taxes on all citizens, including the rich, would benefit all and would increase receipts from the wealthiest Americans as their tax rates would decline without resort to tax shelters; the Wall Street Journal editorial page states that taxes paid by millionaire households more than doubled from $136 billion in 2003 to $274 billion in 2006 because of the JGTRRA. A report published by staff at conservative public policy think tank The Heritage Foundation claimed that the 2001 cuts alone would result in the complete elimination of the U. S. national debt by fiscal year 2010. The Heritage Foundation concluded in 2007 that the Bush tax cuts led to the rich shouldering more of the income tax burden and the poor shouldering less.
CBPP cites data from the Tax Policy Center, stating that 24.2% of tax savings went to households in the top one percent of income compared to the share of 8.9% that went to the middle 20 percent. The underlying policy has been criticized by Democratic Party congressional opponents for giving tax cuts to the rich with capital gains tax breaks. Statements by President Bush, Vice President Dick Cheney, Senate Majority Leader Bill Frist that these tax cuts "paid for themselves" have been disputed by the CBPP, the U. S. Treasury Department and the CBO. Economist Paul Krugman wrote in 2007: "Supply side doctrine, which claimed without evidence that tax cuts would pay for themselves, never got any traction in the world of professional economic research among conservatives." Since 2001, federal income tax revenues have remained below the 30-year average of 8.4% of GDP with the exception of 2007, did not regain their year 2000 dollar
Econometrics is the application of statistical methods to economic data in order to give empirical content to economic relationships. More it is "the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference". An introductory economics textbook describes econometrics as allowing economists "to sift through mountains of data to extract simple relationships"; the first known use of the term "econometrics" was by Polish economist Paweł Ciompa in 1910. Jan Tinbergen is considered by many to be one of the founding fathers of econometrics. Ragnar Frisch is credited with coining the term in the sense. A basic tool for econometrics is the multiple linear regression model. Econometric theory uses statistical theory and mathematical statistics to evaluate and develop econometric methods. Econometricians try to find estimators that have desirable statistical properties including unbiasedness and consistency.
Applied econometrics uses theoretical econometrics and real-world data for assessing economic theories, developing econometric models, analysing economic history, forecasting. A basic tool for econometrics is the multiple linear regression model. In modern econometrics, other statistical tools are used, but linear regression is still the most used starting point for an analysis. Estimating a linear regression on two variables can be visualised as fitting a line through data points representing paired values of the independent and dependent variables. For example, consider Okun's law, which relates GDP growth to the unemployment rate; this relationship is represented in a linear regression where the change in unemployment rate is a function of an intercept, a given value of GDP growth multiplied by a slope coefficient β 1 and an error term, ε: Δ Unemployment = β 0 + β 1 Growth + ε. The unknown parameters β β 1 can be estimated. Here β 1 is estimated to be −1.77 and β 0 is estimated to be 0.83.
This means that if GDP growth increased by one percentage point, the unemployment rate would be predicted to drop by 1.77 points. The model could be tested for statistical significance as to whether an increase in growth is associated with a decrease in the unemployment, as hypothesized. If the estimate of β 1 were not different from 0, the test would fail to find evidence that changes in the growth rate and unemployment rate were related; the variance in a prediction of the dependent variable as a function of the independent variable is given in polynomial least squares. Econometric theory uses statistical theory and mathematical statistics to evaluate and develop econometric methods. Econometricians try to find estimators that have desirable statistical properties including unbiasedness and consistency. An estimator is unbiased. Ordinary least squares is used for estimation since it provides the BLUE or "best linear unbiased estimator" given the Gauss-Markov assumptions; when these assumptions are violated or other statistical properties are desired, other estimation techniques such as maximum likelihood estimation, generalized method of moments, or generalized least squares are used.
Estimators that incorporate prior beliefs are advocated by those who favour Bayesian statistics over traditional, classical or "frequentist" approaches. Applied econometrics uses theoretical econometrics and real-world data for assessing economic theories, developing econometric models, analysing economic history, forecasting. Econometrics may use standard statistical models to study economic questions, but most they are with observational data, rather than in controlled experiments. In this, the design of observational studies in econometrics is similar to the design of studies in other observational disciplines, such as astronomy, epidemiology and political science. Analysis of data from an observational study is guided by the study protocol, although exploratory data analysis may be useful for generating new hypotheses. Economics analyses systems of equations and inequalities, such as supply and demand hypothesized to be in equilibrium; the field of econometrics has developed methods for identification and estimation of simultaneous-equation models.
These methods are analogous to methods used in other areas of science, such as the field of system identification in systems analysis and control theory. Such methods may allow researchers to estimate models and investigate their empirical consequences, without directly manipulating the system. One of the fundamental statistical methods used by econometricians is regression analysis. Regression methods are important i
International Standard Serial Number
An International Standard Serial Number is an eight-digit serial number used to uniquely identify a serial publication, such as a magazine. The ISSN is helpful in distinguishing between serials with the same title. ISSN are used in ordering, interlibrary loans, other practices in connection with serial literature; the ISSN system was first drafted as an International Organization for Standardization international standard in 1971 and published as ISO 3297 in 1975. ISO subcommittee TC 46/SC 9 is responsible for maintaining the standard; when a serial with the same content is published in more than one media type, a different ISSN is assigned to each media type. For example, many serials are published both in electronic media; the ISSN system refers to these types as electronic ISSN, respectively. Conversely, as defined in ISO 3297:2007, every serial in the ISSN system is assigned a linking ISSN the same as the ISSN assigned to the serial in its first published medium, which links together all ISSNs assigned to the serial in every medium.
The format of the ISSN is an eight digit code, divided by a hyphen into two four-digit numbers. As an integer number, it can be represented by the first seven digits; the last code digit, which may be 0-9 or an X, is a check digit. Formally, the general form of the ISSN code can be expressed as follows: NNNN-NNNC where N is in the set, a digit character, C is in; the ISSN of the journal Hearing Research, for example, is 0378-5955, where the final 5 is the check digit, C=5. To calculate the check digit, the following algorithm may be used: Calculate the sum of the first seven digits of the ISSN multiplied by its position in the number, counting from the right—that is, 8, 7, 6, 5, 4, 3, 2, respectively: 0 ⋅ 8 + 3 ⋅ 7 + 7 ⋅ 6 + 8 ⋅ 5 + 5 ⋅ 4 + 9 ⋅ 3 + 5 ⋅ 2 = 0 + 21 + 42 + 40 + 20 + 27 + 10 = 160 The modulus 11 of this sum is calculated. For calculations, an upper case X in the check digit position indicates a check digit of 10. To confirm the check digit, calculate the sum of all eight digits of the ISSN multiplied by its position in the number, counting from the right.
The modulus 11 of the sum must be 0. There is an online ISSN checker. ISSN codes are assigned by a network of ISSN National Centres located at national libraries and coordinated by the ISSN International Centre based in Paris; the International Centre is an intergovernmental organization created in 1974 through an agreement between UNESCO and the French government. The International Centre maintains a database of all ISSNs assigned worldwide, the ISDS Register otherwise known as the ISSN Register. At the end of 2016, the ISSN Register contained records for 1,943,572 items. ISSN and ISBN codes are similar in concept. An ISBN might be assigned for particular issues of a serial, in addition to the ISSN code for the serial as a whole. An ISSN, unlike the ISBN code, is an anonymous identifier associated with a serial title, containing no information as to the publisher or its location. For this reason a new ISSN is assigned to a serial each time it undergoes a major title change. Since the ISSN applies to an entire serial a new identifier, the Serial Item and Contribution Identifier, was built on top of it to allow references to specific volumes, articles, or other identifiable components.
Separate ISSNs are needed for serials in different media. Thus, the print and electronic media versions of a serial need separate ISSNs. A CD-ROM version and a web version of a serial require different ISSNs since two different media are involved. However, the same ISSN can be used for different file formats of the same online serial; this "media-oriented identification" of serials made sense in the 1970s. In the 1990s and onward, with personal computers, better screens, the Web, it makes sense to consider only content, independent of media; this "content-oriented identification" of serials was a repressed demand during a decade, but no ISSN update or initiative occurred. A natural extension for ISSN, the unique-identification of the articles in the serials, was the main demand application. An alternative serials' contents model arrived with the indecs Content Model and its application, the digital object identifier, as ISSN-independent initiative, consolidated in the 2000s. Only in 2007, ISSN-L was defined in the
Republican Party (United States)
The Republican Party referred to as the GOP, is one of the two major political parties in the United States. The GOP was founded in 1854 by opponents of the Kansas-Nebraska Act, which had expanded slavery into U. S. territories. The party subscribed to classical liberalism and took ideological stands that were anti-slavery and pro-economic reform. Abraham Lincoln was the first Republican president in the history of the United States; the Party was dominant over the Democrats during the Third Party System and Fourth Party System. In 1912, Theodore Roosevelt formed the Progressive Party after being rejected by the GOP and ran unsuccessfully as a third-party presidential candidate calling for social reforms. After the 1912 election, many Roosevelt supporters left the Party, the Party underwent an ideological shift to the right; the liberal Republican element in the GOP was overwhelmed by a conservative surge begun by Barry Goldwater in 1964 that continued during the Reagan Era in the 1980s. After the Civil Rights Act of 1964 and the Voting Rights Act of 1965, the party's core base shifted, with the Southern states becoming more reliably Republican in presidential politics and the Northeastern states becoming more reliably Democratic.
White voters identified with the Republican Party after the 1960s. Following the Supreme Court's 1973 decision in Roe v. Wade, the Republican Party made opposition to abortion a key plank of its national party platform and grew its support among evangelicals. By 2000, the Republican Party was aligned with Christian conservatism; the Party's core support since the 1990s comes chiefly from the South, the Great Plains, the Mountain States and rural areas in the North. The 21st century Republican Party ideology is American conservatism, which contrasts with the Democrats' liberal platform and progressive wing; the GOP supports lower taxes, free market capitalism, a strong national defense, gun rights and restrictions on labor unions. The GOP was committed to protectionism and tariffs from its founding until the 1930s when it was based in the industrial Northeast and Midwest, but has grown more supportive of free trade since 1952. In addition to advocating for conservative economic policies, the Republican Party is conservative.
Founded in the Northern states in 1854 by abolitionists, modernizers, ex-Whigs and ex-Free Soilers, the Republican Party became the principal opposition to the dominant Democratic Party and the popular Know Nothing Party. The party grew out of opposition to the Kansas–Nebraska Act, which repealed the Missouri Compromise and opened Kansas Territory and Nebraska Territory to slavery and future admission as slave states; the Northern Republicans saw the expansion of slavery as a great evil. The first public meeting of the general anti-Nebraska movement, at which the name Republican was suggested for a new anti-slavery party, was held on March 20, 1854 in a schoolhouse in Ripon, Wisconsin; the name was chosen to pay homage to Thomas Jefferson's Republican Party. The first official party convention was held on July 1854 in Jackson, Michigan. At the 1856 Republican National Convention, the party adopted a national platform emphasizing opposition to the expansion of slavery into U. S. territories. While Republican candidate John C.
Frémont lost the 1856 United States presidential election to James Buchanan, he did win 11 of the 16 northern states. The Republican Party first came to power in the elections of 1860 when it won control of both houses of Congress and its candidate, former congressman Abraham Lincoln, was elected President. In the election of 1864, it united with War Democrats to nominate Lincoln on the National Union Party ticket. Under Republican congressional leadership, the Thirteenth Amendment to the United States Constitution—which banned slavery in the United States—passed the Senate in 1864 and the House in 1865; the party's success created factionalism within the party in the 1870s. Those who felt that Reconstruction had been accomplished, was continued to promote the large-scale corruption tolerated by President Ulysses S. Grant, ran Horace Greeley for the presidency; the Stalwart faction defended Grant and the spoils system, whereas the Half-Breeds pushed for reform of the civil service. The Pendleton Civil Service Reform Act was passed in 1883.
The Republican Party supported hard money, high tariffs to promote economic growth, high wages and high profits, generous pensions for Union veterans, the annexation of Hawaii. The Republicans had strong support from pietistic Protestants, but they resisted demands for Prohibition; as the Northern postwar economy boomed with heavy and light industry, mines, fast-growing cities, prosperous agriculture, the Republicans took credit and promoted policies to sustain the fast growth. The GOP was dominant over the Democrats during the Third Party System. However, by 1890 the Republicans had agreed to the Sherman Antitrust Act and the Interstate Commerce Commission in response to complaints from owners of small businesses and farmers; the high McKinley Tariff of 1890 hurt the party and the Democrats swept to a landslide in the off-year elections defeating McKinley himself. The Democrats elected Grover Cleveland in 1884 and 1892; the election of William McKinley in 1896 was marked by a resurgence of Republican dominance that lasted until 1932.
McKinley promised that high tariffs would end the severe hardship caused by the Pa
Arthur Betz Laffer is an American economist who first gained prominence during the Reagan administration as a member of Reagan's Economic Policy Advisory Board. Laffer is best known for the Laffer curve, an illustration of the concept that there exists some tax rate between 0% and 100% that will result in maximum tax revenue for government. Laffer's economic insight and influence in triggering a world-wide tax-cutting movement in the 1980s earned him the nickname "The Father of Supply-Side Economics." He is the author and co-author of many books and newspaper articles, including Return to Prosperity: How America Can Regain its Economic Superpower Status, co-authored with Stephen Moore, An Inquiry into the Nature and Causes of the Wealth of States, co-authored with Stephen Moore, Rex A. Sinquefield and Travis H. Brown and Trumponomics: Inside the America First Plan to Revive Our Economy with Stephen Moore. Laffer serves on many boards of directors, including the "Board of Scholars" of the American Legislative Exchange Council.
Laffer was one of four economists who acted as advisers to Donald Trump's successful 2016 campaign for the presidency of the United States. Laffer is the founder and chairman of Laffer Associates, an institutional economic research and consulting firm, as well as Laffer Investments, an institutional investment management firm utilizing diverse investment strategies in Nashville, TN. Laffer was born in Youngstown, the son of Marian Amelia "Molly", a homemaker and politician, William Gillespie Laffer, president of the Clevite Corporation, he was raised in the Ohio area. He is a Presbyterian, graduated from Cleveland's University School high school in 1958. Laffer earned a B. A. in Economics from Yale University and an M. B. A. and a Ph. D. in Economics from Stanford University. Laffer was an Associate Professor of Business Economics at the University of Chicago from 1970 to 1976 and a member of the Chicago faculty from 1967 through 1976. From 1976 to 1984 Laffer held the status as the Charles B. Thornton Professor of Business Economics at the University of Southern California School of Business.
During this time Laffer helped pass Proposition 13, the California initiative that drastically cut property taxes in the state in 1978. In the mid-1980s, Laffer was the Distinguished University Professor at Pepperdine University in Malibu, a member of the Pepperdine Board of Directors. Laffer was the first to hold the title of Chief Economist at the Office of Management and Budget under George Shultz from October 1970 to July 1972. During the years 1972 to 1977, Laffer was a consultant to Secretary of the Treasury William Simon, Secretary of Defense Donald Rumsfeld and Secretary of the Treasury George Shultz. Laffer was a member of President Reagan's Economic Policy Advisory Board for both of his terms and was a founding member of the Reagan Executive Advisory Committee for the presidential race of 1980. Laffer served as a member of the Executive Committee of the Reagan/Bush Finance Committee in 1984, he advised Prime Minister Margaret Thatcher on fiscal policy in the UK during the 1980s. In 1986, Laffer was a candidate for the Republican nomination for the U.
S. Senate—which he lost in the California primary to U. S. Congressman Ed Zschau, who lost in the general election to the incumbent, Democrat Alan Cranston. Laffer served as an economic adviser to Gary Hart during the 1988 democratic primary, he helped with Hart's proposed tax plan. Laffer advised former Governor of California Jerry Brown when he sought the Democratic nomination for the presidential election of 1992 against George H. W. Bush. Laffer identifies himself as a staunch fiscal conservative. However, he has stated publicly that he voted for President Bill Clinton in 1992 and 1996. Laffer references President Clinton's conservative fiscal and unregulated market policies as cornerstones of his support. In 2018, Laffer wrote the book Trumponomics with conservative economic commentator Stephen Moore, wherein they lauded the Trump administration's economic policies. In the book and Laffer argue, without credible evidence, that the Trump administration's 2017 tax plan would raise growth rates to as much as 6% and not increase budget deficits.
In a 2019 review of the book, Greg Mankiw, a conservative economic professor at Harvard University, described the book as "snake-oil economics," and said the authors "do not build their analysis on the foundation of professional consensus or serious studies from peer-reviewed journals." The one issue where Moore and Laffer disagree with Trump is on the issue of free trade, which the duo supports. Although he does not claim to have invented the Laffer curve concept, it was popularized with policy-makers following an afternoon meeting with Nixon/Ford Administration officials Dick Cheney and Donald Rumsfeld in 1974 in which he sketched the curve on a napkin to illustrate his argument; the term "Laffer curve" was coined by Jude Wanniski, present. The basic concept was not new; the Laffer Curve is an economic theory that shows the relationship between tax rates and the amount of tax revenue collected by governments. The Laffer Curve shows that there is a certain point between 0% and 100% where tax revenues are maximized.
The curve suggests that starting from zero, an increase in tax rates will increase the government's tax revenue. This decrease in tax revenue can be explained by decreased incentives for work, etc. Laffer's postulate was that the tax rate that maximizes revenue was at a much lower level than previous
United States House of Representatives
The United States House of Representatives is the lower chamber of the United States Congress, the Senate being the upper chamber. Together they compose the legislature of the United States; the composition of the House is established by Article One of the United States Constitution. The House is composed of Representatives who sit in congressional districts that are allocated to each of the 50 states on a basis of population as measured by the U. S. Census, with each district entitled to one representative. Since its inception in 1789, all Representatives have been directly elected; the total number of voting representatives is fixed by law at 435. As of the 2010 Census, the largest delegation is that of California, with fifty-three representatives. Seven states have only one representative: Alaska, Montana, North Dakota, South Dakota and Wyoming; the House is charged with the passage of federal legislation, known as bills, after concurrence by the Senate, are sent to the President for consideration.
In addition to this basic power, the House has certain exclusive powers, among them the power to initiate all bills related to revenue. The House meets in the south wing of the United States Capitol; the presiding officer is the Speaker of the House, elected by the members thereof. The Speaker and other floor leaders are chosen by the Democratic Caucus or the Republican Conference, depending on whichever party has more voting members. Under the Articles of Confederation, the Congress of the Confederation was a unicameral body in which each state was represented, in which each state had a veto over most action. After eight years of a more limited confederal government under the Articles, numerous political leaders such as James Madison and Alexander Hamilton initiated the Constitutional Convention in 1787, which received the Confederation Congress's sanction to "amend the Articles of Confederation". All states except Rhode Island agreed to send delegates; the issue of how to structure Congress was one of the most divisive among the founders during the Convention.
Edmund Randolph's Virginia Plan called for a bicameral Congress: the lower house would be "of the people", elected directly by the people of the United States and representing public opinion, a more deliberative upper house, elected by the lower house, that would represent the individual states, would be less susceptible to variations of mass sentiment. The House is referred to as the lower house, with the Senate being the upper house, although the United States Constitution does not use that terminology. Both houses' approval is necessary for the passage of legislation; the Virginia Plan drew the support of delegates from large states such as Virginia and Pennsylvania, as it called for representation based on population. The smaller states, favored the New Jersey Plan, which called for a unicameral Congress with equal representation for the states; the Convention reached the Connecticut Compromise or Great Compromise, under which one house of Congress would provide representation proportional to each state's population, whereas the other would provide equal representation amongst the states.
The Constitution was ratified by the requisite number of states in 1788, but its implementation was set for March 4, 1789. The House began work on April 1789, when it achieved a quorum for the first time. During the first half of the 19th century, the House was in conflict with the Senate over regionally divisive issues, including slavery; the North was much more populous than the South, therefore dominated the House of Representatives. However, the North held no such advantage in the Senate, where the equal representation of states prevailed. Regional conflict was most pronounced over the issue of slavery. One example of a provision supported by the House but blocked by the Senate was the Wilmot Proviso, which sought to ban slavery in the land gained during the Mexican–American War. Conflict over slavery and other issues persisted until the Civil War, which began soon after several southern states attempted to secede from the Union; the war culminated in the abolition of slavery. All southern senators except Andrew Johnson resigned their seats at the beginning of the war, therefore the Senate did not hold the balance of power between North and South during the war.
The years of Reconstruction that followed witnessed large majorities for the Republican Party, which many Americans associated with the Union's victory in the Civil War and the ending of slavery. The Reconstruction period ended in about 1877; the Democratic Party and Republican Party each held majorities in the House at various times. The late 19th and early 20th centuries saw a dramatic increase in the power of the Speaker of the House; the rise of the Speaker's influence began in the 1890s, during the tenure of Republican Thomas Brackett Reed. "Czar Reed", as he was nicknamed, attempted to put into effect his view that "The best system is to have one party govern and the other party watch." The leadership structure of the House developed during the same period, with the positions of Majority Leader and Minority Leader being created in 1899. While the Minority Leader
Standard & Poor's
Standard & Poor's Financial Services LLC is an American financial services company. It is a division of S&P Global that publishes financial research and analysis on stocks and commodities. S&P is known for its stock market indices such as the U. S.-based S&P 500, the Canadian S&P/TSX, the Australian S&P/ASX 200. S&P is considered one of the Big Three credit-rating agencies, which include Moody's Investors Service and Fitch Ratings, its head office is located on 55 Water Street in Lower Manhattan, New York City. The company traces its history back to 1860, with the publication by Henry Varnum Poor of History of Railroads and Canals in the United States; this book compiled comprehensive information about the financial and operational state of U. S. railroad companies. In 1868, Henry Varnum Poor established H. V. and H. W. Poor Co. with his son, Henry William Poor, published two annually updated hardback guidebooks, Poor's Manual of the Railroads of the United States and Poor's Directory of Railway Officials.
In 1906, Luther Lee Blake founded the Standard Statistics Bureau, with the view to providing financial information on non-railroad companies. Instead of an annually published book, Standard Statistics would use 5-by-7-inch cards, allowing for more frequent updates. In 1941, Paul Talbot Babson purchased Poor's Publishing and merged it with Standard Statistics to become Standard & Poor's Corp. In 1966, the company was acquired by The McGraw-Hill Companies, extending McGraw-Hill into the field of financial information services; as a credit-rating agency, the company issues credit ratings for the debt of public and private companies, other public borrowers such as governments and governmental entities. It is one of several CRAs that have been designated a nationally recognized statistical rating organization by the U. S. Securities and Exchange Commission. S&P issues both short-term and long-term credit ratings. Below is a partial list; the company rates borrowers on a scale from AAA to D. Intermediate ratings are offered at each level between AA and CCC.
For some borrowers, the company may offer guidance as to whether it is to be upgraded, downgraded or uncertain. Investment Grade AAA: An obligor rated'AAA' has strong capacity to meet its financial commitments.'AAA' is the highest issuer credit rating assigned by Standard & Poor's. AA: An obligor rated'AA' has strong capacity to meet its financial commitments, it differs from the highest-rated obligors only to a small degree. Includes: AA+: equivalent to Moody's Aa1 AA: equivalent to Aa2 AA−: equivalent to Aa3 A: An obligor rated'A' has strong capacity to meet its financial commitments but is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligors in higher-rated categories. A+: equivalent to A1 A: equivalent to A2 BBB: An obligor rated'BBB' has adequate capacity to meet its financial commitments. However, adverse economic conditions or changing circumstances are more to lead to a weakened capacity of the obligor to meet its financial commitments.
Non-Investment Grade BB: An obligor rated'BB' is less vulnerable in the near term than other lower-rated obligors. However, it faces major ongoing uncertainties and exposure to adverse business, financial, or economic conditions, which could lead to the obligor's inadequate capacity to meet its financial commitments. B: An obligor rated'B' is more vulnerable than the obligors rated'BB', but the obligor has the capacity to meet its financial commitments. Adverse business, financial, or economic conditions will impair the obligor's capacity or willingness to meet its financial commitments. CCC: An obligor rated'CCC' is vulnerable, is dependent upon favorable business and economic conditions to meet its financial commitments. CC: An obligor rated'CC' is highly vulnerable. C: vulnerable in bankruptcy or in arrears but still continuing to pay out on obligations R: An obligor rated'R' is under regulatory supervision owing to its financial condition. During the pendency of the regulatory supervision, the regulators may have the power to favor one class of obligations over others or pay some obligations and not others.
SD: has selectively defaulted on some obligations D: has defaulted on obligations and S&P believes that it will default on most or all obligations NR: not rated The company rates specific issues on a scale from A-1 to D. Within the A-1 category it can be designated with a plus sign; this indicates that the issuer's commitment to meet its obligation is strong. Country risk and currency of repayment of the obligor to meet the issue obligation are factored into the credit analysis and reflected in the issue rating. A-1: obligor's capacity to meet its financial commitment on the obligation is strong A-2: is susceptible to adverse economic conditions however the obligor's capacity to meet its financial commitment on the obligation is satisfactory A-3: adverse economic conditions are to weaken the obligor's capacity to meet its financial commitment on the obligation B: has significant speculative characteristics; the obligor has the capacity to meet its financial obligation but faces major ongoing uncertainties that could impact its financial commitment on the obligation C: vulnerable to nonpayment and is dependent upon favorable business and economic conditions for the obligor to meet its financial commitment on the obligation D: is in payment default.