How Do Credit Ratings Agencies Get Paid?

They get paid by the people they rate.  That's right, it's like students bribing their teachers before each test.  The final price of the bribe depends on how good a grade the student receives, the higher the mark, the higher the bribe.  For some damn reason this is all legal.

So, Was the U.S. Bribe Not High Enough?

As a country, we're not allowed to pay credit ratings agencies.  Our debt as a nation is considered "sovereign debt" and is thereby subject to a more accurate system of credit assessment.  What the...

Doesn't Someone See the Problem With This System?

Yes.  In the Dodd-Frank Wall Street Reform and Consumer Protection Act there are numerous provisions for setting up an independent agency that acts like a watchdog along with a clause that disrupts the flawed practice of letting those being rated pay the ones that rate them.  The problem is these agencies and their enforcing arms are not funded.  They don't exist yet because we don't have the money to create them.  This is a prime example of the fact that even when bill gets made into a law, it can still die.  Programs must be approved and funded.  The Appropriations Committee handles that very important second part, which is why you will find many powerful people there.

Someone doesn't want these agencies to ever be born.  Any guesses?

You can find the official summary of the Dodd-Frank Act,  here.

Yes.  Yes, you should be very mad.  These people are a HUGE part of the machine that created the financial crisis.