S&P should avoid downgrading of US sovereign debt

There is a growing fear that in the next couple of months the US financial market could be heading for a very difficult period due to its friendly quantitative easing approach. The US economy is paying the cost of its 2009 USD 787 billion stimulus package and is struggling with US Dollar 1.6 trillion deficits.
The legal debt limit of USD 14.29 trillion is likely to hit by mid of May and unless it gets congress approval, the Obama administration can use emergency measures to avoid default until July 8. Pumping of cash dollars along with FED's loose monetary policy stance have helped in halting the economic slide, may have helped in reducing the borrowing cost, may have increased corporate profit, but the benefit of growth is not visible, as the job situation remains very disturbing, while the unemployment rate is still too high.
The real cause of worry in the financial sector is that what is going to happen if USA loses its triple-A ratings, since the S&P has cut US outlook to negative. One thing is for sure that if it happens then USA could suffer another round of financial crisis. Geithner was asked this question several times. But he always said "no". In a similar situation, when the Irish and the Greece PM were asked that if they are going to ask for a bailout package, they always responded by saying that they are not going to seek funding help. But on the occasion, they were left with no choice and had to ask for emergency loans.
USA came across a similar situation in 1995-96, as budget issues led to temporary government shutdown resulting lowering of outlook of USA's sovereign debt ratings. There is a difference between negative outlook and downgrade. Negative outlook suggests that there is a potential threat of lowering of sovereign debt ratings in the future, which can take 6 months to 24 months. But there is huge possibility that the Democrats and the Republicans may come up with a budgetary understanding that could avoid a rating downgrade.
Furthermore, in 1998, when the outlook for Japan's Triple A rated sovereign debt was pushed down to negative, the yen sank. The world economy cannot afford such S & P adventurism at the moment, as the US dollar too would sink. In my view, USA debt rating is unlikely to be downgraded, as it is still below 100 pct of the GDP. The two political rivals are seriously working to bring down the deficit. USD still enjoys the status of reserve currency and over 61 percent of investments are in the USD. The US housing market is still very fragile, so any bad news of downgrade would be a disaster. Instead, the sentiment of the world financial market will soon shift to Europe and people will start talking of the European debt that requires a euro 45 billion rescue package.
However, downgrading of US debt rating could see a fall to "AA+" from "AAA", resulting in pressure on the US dollar, with possible shift of funds from the reserve currency portfolio and capital inflow. Fall in ratings may put upward pressure on US bond yields. Rush for gold and silver and a further surge in food prices.