America's Triple-A Rating Is At Risk

Financial Times:

Long before the current financial crisis, nearly two years ago, a little-noticed cloud darkened the horizon for the US government. It was ignored. But now that shadow, in the form of a warning from a top credit rating agency that the nation risked losing its triple A rating if it did not start putting its finances in order, is coming back to haunt us.

That warning from Moody's focused on the exploding healthcare and Social Security costs that threaten to engulf the federal government in debt over coming decades. The facts show we're in even worse shape now, and there are signs that confidence in America's ability to control its finances is eroding.

Read the whole story: Financial Times

Comments

[rsprags]

If Moody even attempt to write down the U.S rating they will be shut down; you see Moody is one of the risk rater that allow all these banks with the derivatives swaps to exist by giving them a rating of AAA. Now, the same group of liars are going to be allowed to bring down the american government after it has received record deficits because they had to take on debt to bailed out the banks that caused the issue! Those REPURG who may think this is funny, or getting back at the Obama administration; remember this started under the Bush administration due to the economic crash of the economy, banking and the stock markets. If you are a tax payer you will be paying triple times to the folks who should be protecting our financial interest like the regulators and risk assessor.

[ejhickey]

Obama need to say something about this issue. Trash Moody's reputation or something. I even think he should consider sending in the FBI to seize Moody's records and computers and charge their CEO with financial and economic conspiracy. Just the threat of this action , off the recors and hush hush of course ought to keep these bastards in line.

[rsprags]

If the President or any other agency take action against Moody it will be on record. There was already 8 years of destroying records etc...

[DFL]

Thanks to 8 years of republican economics, standard & poor = your life in a nutshell!

[klondiker]

LOL. standard, poor, and moody - describes me perfectly!

[lightningbolt]

I don't know why Moody's is still in business. They have lost all credibility by giving AAA ratings to fraudsters.

[katooom]

True dat - so the USA should stay AAA - biggest fraudster of all.

[rsprags]

I agree with what you stated 100%. The Wolf is in the hen house trying to kill the hen as well as the other chickens! We will have to put Moody and the other two on notice that this will not be accepted by the citizens of the U.S. who are holding the bag on this deal-at least 50% because of their incompetence and betting with the people they should be rating.

[rsprags]

You repurg do not get the significants of the study do you? The important thing here to note is that the liars in your repurg party who are trying to say that President Clinton, Chris Dodd, and Barney Franks allowed Freddie and Fannie to cook up a deal with irresponsible minority homeowners who took the financial system down is a big fat lie. We all knew it from the first telling of the lie. Remember this Moody and others are controlled by the same repurg clowns that have allowed their friends the BIG Bank executives to ruin this country's banking system under the notion of deregulation, captalism and free market.

[BabblingBrooks]

Interesting study re minority home ownership:

"At the end of the day, minorities are still much better off now than in 1995, if measured by homeownership," said Rakesh Kochhar, lead author of the study, which used housing, economic and demographic data from the U.S. Census Bureau, among other sources.

So, from 1995, 5 years of Clinton and 8 years of Bush, minority home ownership is now much greater.

That's not such a bad accomplishment.

AND no terrorist attacks since 2001!

[yappnmutt]

it must be wonderful having such a simple view of the world around you. how do you do it? is it learned or is it genetic?

[BabblingBrooks]

"It takes an exceptional mind to see the significance of the obvious," or words to that effect.
--Alfred North Whitehead

Actually, one must see the complex and have a fairly encyclopedic fund of knowledge to be able to sort through the garbage of the internet.

"Minorities did increase their homeownership rates disproportionately in 1995-2004, thanks in part to relaxed loan standards; and they lost their homes in disproportionate numbers after the bubble burst."
---J. Taranto

But in the end, they STILL gained most.

[BabblingBrooks]

The problem with modern education is that people know so little that they do not have the background data to evaluate all the internet errors, the partisan spin, the bias, and the pure fabrication and get to a close approximation of the truth.

Some teachers seem to believe that they just have to "teach students HOW to think" and the student will then be able to access all the info he needs. That's simply WRONG. Without a generous mental fund of actual, verifiable true facts, a good grasp of reality, the average internet surfer is just as capable of being fed and believing garbage as in being able to search out what's true.

[billw8017]

Aren't these the same people who gave the subprime loans a AAA rating?

Our federal government's debt is denominated in dollars which the feds can print at need. You will always get 100% due in nominal cash, the same money commercial US $ paper uses. In this instance, the US government is the safest possible investment because everybody goes down when they go down.

Who are these commentators who think that money is something real? That there is some point in the government protecting and cherishing it instead of pursuing the real needs of the American people? Money facilitates commerce and industry, period. YOU should be more deliberate about it since you can't print your own. Bad money policy undermines trade and, wages being somewhat inflexible, hurts the workers. This is one of those things where the journey matters more than the arrival; the quest, not the end of the quest. The manager of the roller coaster should attend more to its safety than the thrills that are the attraction to the riders.

[BabblingBrooks]

Do you have a clue who was vouching for the bad loans?

Barney Frank, Chris Dodd, Andrew Cuomo...ge­e, aren't they now being rewarded?

[Patriot86]

More red herrings to try to deflect blame from the unregulated so called capitalism which Bush believed in...every time you let the financial idiots regulate themselves they break something.­..the 1930's, S&L scandal of the 80's and now a full scale economic meltdown for Main Street thanks to these fools...on­ly they managed to blackmail the government into bailing them out...of course Paulson had good reason and probably did not need much persuasion as he was CEO of Goldmans..­.one of the blackmailers.

[Truthahn]

You don't get it. Just giving creditors the same number of nominal dollars does not equal genuine creditworthiness. The German Weimar Republic printed so much money that it reached a point where every citizen had enough nominal currency in his pocket to pay the entire national debt. Would any sane person call the Weimar Republic a solid credit risk? Of course not. Governments that make promiscous use of the printing press to pay their debts are for all intents and purposes DEFAULTING on their debts.

And apparently you think destroying the value of the dollar will be a thing of little consequence. Wait til it happens. Then you'll wake up.

[Peter007]

US Bonds are sold all over he world. A downgrade in rating would increase our interest costs.
I' m not sure but I guess that cost could be nearly 50 billion dollars over a few years.
Over borrowing never hurt General Motors.

[Furby]

Really? The US has a triple A rating? My credit rating must be quadruple A.

[DiogenesOfAlaska]

Let's just assume that it is.

[viewfromuphere]

kind my first thought too

[SangZe]

SO what if we lose our rating? We've already lost our soul.

[davidwayneosedach]

This should not be news. Our number one super power status has groundto a halt. China and/or India and Brazil will overtake us in less than twenty years.

[yappnmutt]

that should rally the market another 30%..

ponzi would be proud to know the usa .gov used his model for its inspiration in modeling its idea of fiscal responsibility.

[Cyberoptic]

The purpose of this article, rests here: That warning from Moody's focused on the exploding **healthcare and **Social Security costs that threaten to engulf the federal government in debt over coming decades.

The purpose here is to threaten the public, that "oh no" if we have health care reform, or want social security in the future, we might lose our ratings.

What about many other "exploding costs?" Such as mismanagement and corruption on Wall Street, or unfunded military costs? Why aren't they being mentioned?

The best thing for the economy is to reinstate the Glass-Steagall act. The best thing for our ratings is to examine Moody for their bias.

[Coastalthinker2]

I agree with your comments. Another article trying to scare the public and blaming our future credit ratings on health care reform.

Notice the comment, "Moreover, many of the trillions of dollars recently funneled into the financial system will hopefully rescue it and stimulate our economy". The author failed to comment on the revolving door of money to Wall Street and many other issues.

[Cyberoptic]

Someone just emailed me this little bit of data
--------------
Where did Wall Street get its name?

Free-roaming hogs were famous for rampaging through the valuable grain
fields of colonial New York City farmers. The Manhattan Island residents
chose to block the troublesome hogs with a long, permanent wall on the
northern edge of what is now Lower Manhattan. A street came to border this wall named Wall Street.
----------------

Maybe we need another wall for the free-roaming hogs?

[Patriot86]

Americans must live like third world peasants so our betters on Wall Street can make their obscene profits. No health care, decent wages, 40 hours work weeks or even retirement. These people's are truly greedy robber barons. Investigate Moody's because they were part of this economic mess. Everyone should be investigated, and some should go to jail. We need to prosecute the thugs so they will not do this again. These people are not Americans, they have no love of country and are truly global citizens who value only money. They must be stopped in order to protect this country. They are very dangerous.

[ibsteve2u]

lollll...b­ut the question - as the current financial crisis should point out, especially given Moody's not-quite-­stellar-re­cord in the ratings game over the last decade - is does a rating from Moody mean anything at all?

[RRoadrunner]

Moody’s? Isn't this one of the rating agency that gave out AAA+ ratings to all the instruments and companies that brought down the house of cards?

[KoolAidAmerica]

So I guess more entitlement spending is the solution

[olephart]

Maybe we could invade Grenade.

[KoolAidAmerica]

That would cost less than welfare for freeloaders and illegals

[rwext]

AND THE SPECIAL MOMENTS SINCE JAN 20 NEVER STOP

[joshuahmcdonald]

Yeah, because this is caused by what has happened in the last 4 months and not the previous 8 years...?

[truth969]

DEAD ON...We are in so much trouble.Yo­u are witnessing the destruction of our country.