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

[curiousasheck]

Beneath the prosperous lights of main streets all over the country, and the gaudy, tempting shop-windows, and the silent swish of expensive automobiles the cry of "Depression" is rending the air in this Land of Millionaires. Rolls-Royces and Packards, containing their laughing, bejewelled, selfishnes­s-petrifie­d human beings, pass by all the poverty-singed unfortunates.

How ironic

[vippy]

The Treasury Bill - Euro Dollar Spread is currently excellent at .707%. So maybe there is a reason
to this madness.

[Ppossom]

You can buy credit default insurance on US Treasury obligations from AIG, that way, if they go bad, you can always collect from the US Treasury.

[jazzman]

Just go to Standard and Poors. They'll give a triple A ratings to just about anything including those bundled securities that contained all those subprime mortgages given to people who were never going to be able to pay them. While the government is at it they should take out some insurance. Go buy some credit default swaps from AIG. I hear they'll sell it to anybody.

[isolow]

We're an insolvent country with a fiat currency that is slowly loosing its value to others outside our borders.

But Miss California did keep her crown. So we got that going for us.

[olephart]

Our money is as good as our B.o.o.b.s.

[joshuahmcdonald]

The fact that we still have a AAA rating indicates that the rating system is broken.

[JoeBlough]

I thought no one believed the credit rating agencies anymore due to collusion and bad information? They failed us before, why would this be any different?

[BabblingBrooks]

The Obama plans have nothing to do with improving the economy of the country--they are all designed merely to grow the federal government and produce more dependence upon big government and to damage corporations. That's what looking at the coldly and logically would imply...

[joshuahmcdonald]

Your name is appropriate. What exactly are you babbling about?

[truth969]

That comment is correct.Li­berals are economically challenged.

[JoeBlough]

HaHaHa - you funny.

[knosiswar]

You voted for Bush, so we know you don't know S*!/

[petridish]

This is TSHTF stuff. If we lose our rating then the interest payments on debt goes way up. Considering our .gov is broke and we plan on spending an extra 3.5 TRILLION all while tax receipts are cratering.­.. this will not end well.

Green shoots my butt.

Note to .Gov, you can not spend your way out of too much debt. Such a simple concept, no wonder our illustrious leaders can not grasp it.

Bush was a disaster and Obama is gonna finish the job, unfortunately

[JoeBlough]

Time to pull back on all those wars, cocoon for a while and spend our money on ourselves. The world can get along without us, I’m sure.

[slowhand0728]

The Irony here is tell us something we dont already know? With the amount of debt, Social Security and Medicare going bankrupt, and has been for decades now. What else would we expect? The cost of borrowing has to go up and once inflation kicks in, we are really in for a ride. Just do it and get it over with.

[BabblingBrooks]

And who was obstructing when George W. wanted to reform Social Security?

[JoeBlough]

Good Sense!

[olephart]

Those who didn't want to invest with Madoff.

[dizmo4]

These are the same ratings companies that gave the likes of Lehman Bros, Bear Sterns, etc. Triple A ratings right before they collapsed.­..

[jeffrey678]

Are these the same rating companies that ginned up the investments on wall street before the crash? They probably want a payoff . I am sure for the right fee they would increase are rating like they did for wall street banks.

[olephart]

How about we don't indict them for conspiracy and fraud in exchange for the same services they gave Goldman Sachs et. al.

[lvdragonlady]

Businesses like this should have NO right to do any kind of rating of anything.
What qualifies them to do this?
Who give them this kind of power?
How many times have they been paid off to change a rating either up or down?
OUTLAW these just like the LOBBYISTS, they serve NO useful purpose.

[Shammie2000]

Come on now, after the last couple years will anyone do anything based upon what these rating
(maybe hating) agencies say. Please!

[ranchomerced]

What do they expect when the dems took over congress two years ago and then we elect a socialist for president? We are going to be taxed and spent into oblivion by these politicians. I am shutting down my company this week. All my clientele are either behind on their payments or have stopped paying all together. They are scared of where this country is heading. I will be sending seven more people to the unemployment line. AND I DONT BLAME BUSH!

[sposton]

This article is aimed precisely at people like you. Our finances have been hollowed out by Big Money interest from the corporate America. This represents a very small number of people who need broader support from people like you. Obama is not a socialist - that is just right wing nonsense. Read Martin Wolf's piece in today's FT and everything will become clear to you (if you keep an open mind):

http://www.ft.com/cms/s/0/5e7dd89c-3f1c-11de-ae4f-00144feabdc0.html

"To me, he is a pragmatic conservative, albeit one responding to extraordinary times. In his own way, Mr Obama is following the path trodden by Franklin Delano Roosevelt.

Nowhere is his conservatism more obvious than in the handling of the economic crisis. What we have seen unfolding, from the president’s choice of Lawrence Summers and Tim Geithner as his principal policy advisers, to last week’s “stress tests”, is classic conservative policymaki­ng."

Make sure you read the whole article.

[jackson92186]

are you kidding? Obviously you don't even understand what "conservative" means. It was the conservatives that did not vote for the bailout. A conservative stance would have been much different than obama, without bailouts to GM, AIG, and the banks. Real conservatives know that Obama's policies are fascist, because you have the government subsidizing cooperate interests.

That article is pure ignorance.

[drkazmd65]

You obviously need to go look up, read, and reflect on what the term 'Socialist' means rancomerced.

I am fairly certain that it doesn't apply to Obama,... it might have applied to the attitude of Bushco as regards support of big companies though.

[ranchomerced]

Try the sugar free Koolaid; drkazmd65 it wont be taxed to pay for socialist healthcare.

[pewty]

Dont use the streets, sidewalks, police or fire no SS for you and i COMMAND you to never use Medicare or Medicaid. If you don t comply with these commands then you are a SOCIALIST!!!!!!

[Paul]

If Obama was a socialist there would be no BofA or CitiBank - they would be nationalized into a new government-run bank.

So your clients can't pay you because their taxes are too high? You need to sell to a more upscale crowd - the folks who got all those tax breaks under Bush.

[ranchomerced]

Upscale crowd? I sell $500,000 and up classic cars.

[olephart]

Ninety per cent of our debt occurred after the advent of Reaganomics. Reagan first tripled the debt. Oh Congress you say? The Republicans controlled the Senate and conservative Democrats like Phil Gramm gave them control of the House. It was Reagan's budgets that were passed. The only balanced budget came as a result of Liberal inspired tax increases in the early 90s. As soon as Republicans regained control of all three branches deficits skyrocketed.

No bailouts? You can deny them but it was the conservative mantra of deregulation that caused the collapse that created the need. Remember, it was bank deposits including money market deposits that were in jeopardy of going to zero. That FDIC insurance on your bank accounts is a Liberal invention. Put your money where your mouth is like an uninsured account operated by Madoff & Associates. This year's budget was submitted by Bush. It includes seven hundred billion to bail out his Treasury Secretary's buddies. It includes the wars, no bid contracts and crony privatization efforts costing over half a trillion a year. Denial is a state reserved for conservatives that can't handle the truth.