neil irwin writes about economics for the "washington post."e joins us by phone to talk about the downgrade for the first time in history of u.s. credit by the agency, standard & poor's. why did s&p drop the rating? >> the u.s. government has the political will and the kind of discipline policymaking to deal with our debt problem and deal with it in a responsible way, and as a result, they feel we're no longer a a.a.a. rating, no longer an ultrasafe form of debt for investors around the globe to hold, so they downgraded. >> what about the congressional debt deficit bill on tuesday? did that have any effect here? >> well, the bill was passed. if it had not pass and had we had dwault on our debt, that would have been even worse. but they felt the process that got there was not one that suggested there's going to be a reasoned and studied progress toward deficit reduction over time. it's not that the u.s. is incapable of paying its debts, the problem they identified is we make lack the political will, the governance to have good political decision

neil irwin, who's been at this table many times, is on the phone with us this morning. he has the lead story, the u.s. stocks down 4.8%. american european crises fueling this cycle. mr. irwin, thanks for your time this morning. what do analysts say is behind the market plunge yesterday? guest: on some level, it's pretty simple. there's a loss of confidence that this u.s. economy is on track and going to keep growing. there's simultaneously, you have, in europe, a crisis that's rapidly spiraling out of control and fears that the debt crisis has started in the smaller countries in europe like greece, ireland, and portugal, may be spreading to bigger countries, mainly spain and italy. take that together, and you have a recipe for fear and worry that the world economy is going to be in rough shape. host: and what is the source of the vicious cycle analysis? really, can you describe what people are seeing in that? guest: the thing is, these two things don't happen in a vacuum. this is weighing on u.s. businesses and likely to make u.s. companies more reluctant to expand and

and neil irwin, who covers the fed for the "washington post." it's great to have you both with us. thank you. diane, let's start with what the fed said today. they had a gloomy forecast for some time to come. they said they're going to keep interest rates low for some time. interpret. >> well, i think actually the statement was even more breakthrough than that. they also said that they would continue to monitor and review and make any actions and adjustments necessary to the size and composition of their balance sheet. that's fed-speak for the opening the door to additional quantitative... we had seen the big bond-buying purchases of treasury bonds that ended in june of 2011. so they're opening the door to that. they're going to clarify that over the next several weeks and months. my guess is the jackson hole wyoming meetings will be quite interesting again with lots of news coming from there. once traders get down to interpreting the full body of what the fed was saying is the fed really stood by the g-7, the developed countries that said on sunday that they would provide whatever

joining me live "the washington post" financial reporter neil irwin. is everybody looking for the weekend, need a break, a time to breathe and don't panic. >> absolutely. after this last couple weeks everyone involved in financial markets could use a vacation. this has been an up and down cycle. we've been moving 5% a day every day for about two weeks. so just a sense that things are a little bit normal is a real sense of relief even the part that it's a market gain day. >> we've seen four straight days of 400 point plus surges or plunges with the dow. incredible volatility. at this point does it say anything about the volatility of our economy, the stability of our economy? >> it does. there are two big questions hanging over the financial markets right now. one is europe whether europe can contain its debt crisis and not fall into a really dark crisis situation. the other is the u.s. economy. we've seen a lot of mixed data the last few weeks are we headed to a double dip. are we headed to a recession in the last couple pieces of data have pointed to

let me bring in neil irwin a financial and economists reporter with "the washington post." we keep hearing this phrase, double dip recession. a lot of people don't feel like we came out of the recession. is this now a double dip? >> we don't have solid evidence yet. the odds have increased a lot over the last two weeks. technically the last recession ended in june of 2009, that's two years ago. as you say, it really doesn't feel like it. we've had this very slow growth pattern since then. it's really not a strong enough growth to feel much of a difference. even if we do have a double dip it's from a lore point and a point of not a good position to start from. >> by the way, when we're talking about a double dip, we're talking about a recession, a short lived recovery and back to another recession. we had better than expected jobs report today. that's a good thing. i don't want to underplay the jobs report. but we heard ezra kline say you need more job growth than that to sustain a recovery. what other concerns do you have about gdp and what other signs that might indicate o

. >> vera gibbons, ron insana, and our birthday boy neil irwin.re is at least something to celebrate. how is that? >> thank you all. >>> coming up in just a few minutes, we're going to see how the u.s. credit rating downgrade is making news overseas. also coming up, it can be a dangerous job when a major league pitcher takes the mound. and we're going to show you why here on msnbc saturday. that's not the shot, but there's another one. yeah, that's the shot. he is down. i love that my daughs part fish. but when she got asthma, all i could do was worry ! specialists, lots of doctors, lots of advice... and my hands were full. i couldn't sort through it all. with unitedhealthcare, it's different. we have access to great specialists, and our pediatrician gets all the information. everyone works as a team. and i only need to talk to one person about her care. we're more than 78,000 people looking out for 70 million americans. that's health in numbers. unitedhealthcare. is best absorbed in small continuous amounts. only one calcium supplement does that

joining me from washington neil irwin, financial reporter for "the washington post." good morning to you. >> good morning, alex. >> let's get your reaction as you are reading the downgrading of the u.s. credit rating. >> in many ways it's not a surprise. s&p was pretty strongly suggesting they were leaning this directions during the debt ceiling debate that ended about a week ago. now the question is what it's going mane, what's going to happen, and, you know, the asian markets open sunday evening our time. u.s. markets open monday morning. the question is will this cause some nasty ripple effects that it's hard to foresee and hard to imagine what they would be, but will this cause problems in the financial system that have impact for the real competent sxhe for every american's 401k. >> okay. also, does this do anything to change what we got from fitch's and moody's? they kept us at triple-a, so might this influence them or not? >> you know, eventually. i'm sure they're all reviewing their models and their analysis and making sure they're comfortable with the triple-

. -- neil irwin. the announcement came out officially that they had downgraded the u.s.redit rating from aaa to aa-plus, how did we get to that point? guest: they are not really making a judgment about the u.s. financial capability to pay our debt but our political capability to pay our debts. there not as confident as they were few weeks ago that the u.s. government and its political system has the will and ability to reach the decisions to guarantee that u.s. treasury bonds are the safest investment on earth. a remarkable transition period during the debt ceiling debate they sensed that they were going and distortion, but it is stunning. host: you say that it could increase washington's cost to borrow money as well as ripple effects around the globe. what has been the reaction to this downgrading of the credit rating? guest: hard to know until markets opened up on monday morning. and outside rating agency is saying that u.s. securities are no longer as safe, the safest investments on earth. it is hard to say how that will ripple through the financial system. one thing

neil irwin writes about the impact of politics 4 "the washington post." he talks about the impact. why did s&p dropped the rating? >> balak faith that the u.s. government has the political will and discipline policy making to deal with our debt problem in a responsible way. as a result, they feel that we are no longer an ultra safe form of debt for investors around the globe to hold, so they downgraded s. >> what about the congressional debt and deficit bill on tuesday. did that have any effect? >> obviously, if the bill had not passed and we had defaulted, it would have been even worse, but they felt that the process that got there was not one that suggested that there would be a reason and steady progress toward deficit reduction over time. it is not that the u.s. is incapable of paying its debts. problem and identified was that we may lack the political will, the governance to have good political decision making to get there in an orderly way. >> how will this affect interest rates? >> we do not know for sure. we will find out starting next week when the markets opened monday mo

. >> neil irwin, his piece a little on-line, we appreciate your time. >> wednesday on "washington journal," tavis smiley and cornel west. they are going on a tour to poor communities across the u.s., and then, jules kroll on rating agencies. after that, martin regalia about creating job growth.

. -- neil irwin. >> the fed gave a specific date to which they will keep rates low. next two years, we will have that low-interest rate policy in place. that was a giant shock but that -- they said that growth has been weaker than expected. it is clear that the fed is nervous and they are ready to act if things deteriorate further. >> let me read from the statement, just part of what the fed announced today, and it is available our website, c- span.org. household spending plan out, the housing sector remains depressed, if the business investment and equipment and software continue to expand. what does that tell you? >> a very weak economy. it does not appear that we are shrinking or are in another recession. the fed does not expect another recession. but the college has weakened at a lot. we see we numbers on job growth, one gdp, output, even consumer spending has come off. anre right on the brink of economy that is growing, not rapidly, and something worse than that for the hope is that we can stay on the positive side of the ledger. >> at 1 point the market was up

. -- neil irwin. the announcement came out officially that they had downgraded the u.s. credit rating from aaa to aa-plus, how did we get to that point? guest: they are not really making a judgment about the u.s. financial capability to pay our debt but our political capability to pay our debts. there not as confident as they were few weeks ago that the u.s. government and its political system has the will and ability to reach the decisions to guarantee that u.s. treasury bonds are the safest investment on earth. a remarkable transition period during the debt ceiling debate they sensed that they were going and distortion, but it is stunning. host: you say that it could increase washington's cost to borrow money as well as ripple effects around the globe. what has been the reaction to this downgrading of the credit rating? guest: hard to know until marks opened up on monday morning. and outside rating agency is saying that u.s. securities are no longer as safe, the safest investments on earth. it is hard to say how that will ripple through the financial system. one thing