Business Update on KPCC: S&P aftershocks?

So far they've been limited, at least as far as downgrades on local government issues are concerned. Here's S&P's mish-mash of a statement this morning:

We do not directly link our ratings on U.S. state and local governments to that of the U.S. sovereign debt rating for reasons outlined in our criteria. However, we recognize generally that U.S. state and local governments'economic performance is frequently similar to the nation and they share responsibility for some spending items with the federal government. Yet individual state and local governments' funding interdependencies with the federal government vary considerably.

In other words, they won't but they might. For state and municipal budget officials, perhaps the more relevant issue is how this economic nervousness will affect overall business and consumer activity. We get into some of that during our weekly chat. Available at kpcc.org and podcast (Business Update with Mark Lacter). Transcript is after jump.