Why did Standard & Poor's take the seemingly radical step of downgrading the US government's credit rating, and how do ratings agencies wield such power in the first place?

Much of the coverage surrounding Standard & Poor’s downgrade of the US government’s credit rating from AAA to AA+ has been shrouded in economic jargon. But why did the ratings agency take this seemingly radical step, and what will the ramifications be for our economy? The move could have wide-ranging consequences for all Americans, even those who have had nothing to do with Washington’s manufactured economic crises.

The Nation‘s DC correspondent George Zornick spoke with Robert Pollin, economist and founding co-director of the Political Economy Research Institute, about the history of the ratings agencies and the role they play in steering our economy. For more on Standard and Poor’s and the government’s deficit, read Zornick’s post, Is It Time to Downgrade the Rating Agencies?

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—Anna Lekas Miller