How Long Until Credit Warnings Are Considered Hate Speech?
You might have missed this buried in all the talk about a call to returned civility in political discourse, but apparently the country’s going broke, has this little debt problem, and its Triple-A credit rating is in jeopardy – again – of being downgraded. This from The WSJ:
Moody’s Investors Service said in a report on Thursday that the U.S. will need to reverse the expansion of its debt if it hopes to keep its “Aaa” rating.
“We have become increasingly clear about the fact that if there are not offsetting measures to reverse the deterioration in negative fundamentals in the U.S., the likelihood of a negative outlook over the next two years will increase,” Sarah Carlson, senior analyst at Moody’s, said.
Separately, Carol Sirou, head of Standard & Poor’s France, told a Paris conference on Thursday that the firm couldn’t rule out lowering the outlook for the U.S. rating in the future.
“The view of markets is that the U.S. will continue to benefit from the exorbitant privilege linked to the U.S. dollar” to fund its deficits, Ms. Sirou said. “But that may change.”
…
In its report, Moody’s said the U.S., Germany, France and the U.K. still have debt metrics compatible with their Aaa ratings.
But all four countries must bring future costs of pension and health-care subsidies under control if they “are to maintain long-term stability in their debt-burden credit metrics,” Moody’s said in its regular Aaa Sovereign Monitor report.
These measures of the U.S. debt burden include federal debt to revenue, estimated to average 397% of gross domestic product until 2020. The ratio of interest to revenue, meanwhile, is expected to rise to 17.6% by 2020, nearly double last year’s level. These are “quite high for an Aaa-rated country,” Moody’s said in its report.
We now return to your regularly-scheduled programming of civility in political discourse and why Sarah Palin is the devil incarnate.
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