The decision taken by the Standard and Poor's ratings agency to downgrade the United States to AA-plus from AAA wasn't something the country deserved, says investment icon Warren Buffett.
The United States has no debts denominated in other currencies but its own, which means it can pay what it owes.
"I don't get it," Buffett tells Fox Business News.
"In Omaha, the U.S. is still triple A. In fact, if there were a quadruple-A rating, I'd give the U.S. that."
Buffett is isn't going to sell his dollar-denominated assets and run elsewhere in the meantime.
"We just filed our 10Q and we have $47 billion in cash and cash equivalents. Well over $40 billion of it is in short-end T-bills. [The S&P downgrade] doesn't tempt me to sell. We'll stay right there."
Furthermore, the downgrade won't roil world markets for very long either -- if at all, Buffett says.
"If nothing else takes place, meaning, if all other variables hold and there isn't say, a new problem in Europe, it won't make any difference."
"Think about it. The U.S., to my knowledge owes no money in currency other than the U.S. dollar, which it can print at will. Now if you're talking about inflation, that's a different question."
Buffett also tells Fox to remember that S&P has made downgrades in the past of which he disagrees.
"Remember, this is the same group that downgraded Berkshire," he says, referring to his company Berkshire Hathaway.
The Obama administration and Congress recently agreed to $2.4 trillion in spending cuts to lift the $14.3 trillion debt ceiling although the agency says that agreement was not enough to address the country's gaping deficits.
"The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics," Standard and Poor's says in the downgrade report.
Others, however, feel the U.S. did deserve the downgrade, or should at least learn a lesson from it: that Washington can no longer spend at will without repercussions.
That's what the country's chief creditor China is saying.
"The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone," China's official Xinhua news agency said in a commentary, according to Reuters.
In the Xinhua commentary, China blasts Washington for its "debt addiction" and "short sighted" political wrangling."
"China, the largest creditor of the world's sole superpower, has every right now to demand the United States address its structural debt problems and ensure the safety of China's dollar assets."
Standard and Poor's says it may slash U.S. ratings even further, down to AA from AA+ within the next two years if the country comes under further fiscal stress.
"It’s a reflection of the fact that we haven’t done enough to get our fiscal house in the order," says Anthony Valeri, market strategist in San Diego at LPL Financial, which oversees $340 billion, said in an interview before the downgrade, according to Bloomberg.
"Sovereign credit quality is going to remain under pressure for years to come."
© 2015 Moneynews. All rights reserved.