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

[sposton]

Anything written by a Peter G. Peterson Foundation guy should be viewed by suspicion. This a covert attack on all social programs in this country. It is a warning shot across the bow of Obama's administration not to attempt to pass any meaningful health care reform. Its main message is neatly wrapped around fiscal responsibility but its real aim is to kill social spending. Such outfits are curiously silent on trillions of money given to banks but when it comes to programs that might help our citizens they are conspicuously concerned about fiscal matters. Read William Greider's excellent February 2009 piece which explains this matter:

http://www.thenation.com/doc/20090302/greider

I am also against irresponsible fiscal policies but let's cut corporate welfare, obscene military spending, useless wars,... Why zoom onto social spending first? The idea that our pathetic social spending levels will make us uncompetitive (argument often heard) flies against the fact that most European nations spend more in this area than we do and they seem to be doing well enough; they are certainly not going out of business as American conservatives have been predicting for decades.

Read this piece by Harold Ickes from 1938 and see if it resonates with our current situation:

http://www.progressive.org/node/128769

[inorbit]

People are still giving Moody's credence?????

[DXM]

"Recent research conducted for the Peterson Foundation shows that 90 per cent of Americans want the federal government to put its own financial house in order. It also shows that the public supports the creation of a fiscal commission by a two-to-one margin."

Yeah, Americans overwhelmingly support these things... until the the fiscal commission report comes out. Inevitably this report will include long term cuts in entitlement programs (which Democrats will not support) and defense spending (which Republicans will not support) combined with increases in taxes on EVERYONE - not just the rich (which the American people will not support). For a generation Americans have been conditioned to believe they can get everything they want from the government and not pay for it. Well, that is fundamentally not true and the bill is now coming due.

[studlyguy]

Sorry America having a triple A rating,is a joke,the banks are failing,AIG is bailed out,the auto industry is bankrupt,the economy is freefalling to the abyss,sorry ,I give third world America a F- rating.

[Patriot86]

I give you a F rating...w­hy do you hate your country?

[sixx]

Didn't Moody's give the repackaged toxic mortgage loans a triple A rating. If so, that would make them criminals, not unlike Arthur Andersen with Enron.

[ejhickey]

so if toxic mortgages got AAA ratings and these loans were bad, what does that say about the US credit rating? Are we worse than toxic mortgages? Also doesn't Warren Buffet own part of Moody's? Is Warren saying the Moody's is unreliable?

[sixx]

I'm saying that someone from Moody's should be indicted.

[Republicrats]

Moody's? You mean the ones that were in the tank for all of the sub-prime lenders?

"When a government controls both
the economic power of individuals
and the coercive power of the state ...
this violates a fundamental rule of happy living:
Never let the people with all the money and
the people with all the guns be the same people."

[outnow]

The U.S. is the first debtor Empire. How long will that last? Our military will not make us solvent unleess we attack those to whom we owe money. Just attacking those that have oil has not worked.

I am confident that I will not see any Social Security or MediCare that I paid into since 1964. That's my credit rating for my country. Ever since Reagan and Bush used the "trust" funds for military spending, these programs are severely underfunded. The financial and economic crisis means less tax dollars coming in. Don't forget that debt is rising exponentially and the funds went to bailout the bankers and insurance companies that contributed to Obama's campaign.

Both political parties are in the pocket of corporate America. Special interest took the money necessary to fund a great society. Now we have a debtor nation syndrome where peasants and serfs earn peanuts while corporations make record profits while being bailed out and dumping their employees.

[robinhood1]

You must be counting your earnings working as a ticket taker at the local movie house when you were in high school. You should apply for benefits as soon as you can, unless you are planning on working until you go to Valhalla.

[HowietheScreamer]

You can't go to Valhalla if you die of old age.

[sposton]

I don't think it is sustainable. The question is how is this going to be manifested. Is it going to be sudden drop or will it be a slow degradation of our standards of living? In any case, those who have benefited will still have their loot in one way or another; it is the rest of us who have paid for American Empire and will pay the costs of its aftermath.

I think the US dollar will eventually lose its reserve currency status and will effectively collapse. The pressure from our banksters will be to replace the US dollar with some kind of world currency, controlled by a world central bank which will be responsible to nobody but banksters. This is how they will perpetuate their thieving system and control the rest of the world.

[Eusebio]

Perhaps the premise of the argument is sound, but honestly Moody's and all the others ratings companies can go #@#! themselves.

I'm downgrading Moody's: FF-

[american-dolt]

Who the Hell is Moodys anyway?

[PhilipTaylor]

IS ALL PUBLIC HOPE LOST TO THE FINANCIAL LORDS?

Economic Sovereignt­y=American gov makes decisions independently of other governments!
Crisis of American Economic Sovereignty=Exist?
American economy can improve=while outlook for American Economic Sovereignty Declines
FED wants America economic growth BUT willing to give up Economic Sovereignty
Patriots=Want core American Ideas+Cons­titutional Heritage+will sacrifice Economic Growth
Investment Bankers want =International Political Regime to Smooth out Markets Behaviors
Agreement=­Washington­+Wall Street=financial reforms to prevent another crisis like 2008-2009
Clinton+Bush=Errors to insure incalculable money made by Elites during era of global free trade
Obama=in spite of being impressively intellectu­al+honorab­le=Forced to use new regulations
Populist Reformers=find New Regulations effects less appealing than expected due to CRISIS
Reforms=will prevent Public from ever having a chance to Throw off Their Financial Lords
Bad Bank=Garbage dump of every kind of Bank Debt that is then destroyed
Voting populace=Can throw off their government and its "Bad Bank"

Alternativ­e=Obama+Co­ngress Stand up for Middle-Class Main Street Americans=THE 99%
__________­__________­__________­_________

Today we LEARN:

Wall Street gets their $12,800,000,000,000 right away! (Bloomberg News) + $1 Trillion on the way!

Main Street gets $45,000,000 in two months!

Main Street gets 0.00035156­% of what Wall Street gets!

For every $1 Main Street Gets from Obama+Congress, Wall Street gets $284,444.

Who does this Obama Administration and our Congress Really Care About?

[ThatOne4Me]

the money men

[Patriot86]

Bush gave most of the money to Wall Street before Pres. Obama was elected. You may want to rewrite history, but I won't forget this as most American will not forget this. It was Bush anti-regulation policies that did this to us.

[vagabondvet]

Of course the deficits and the debts have come home to roost. But there are more signs than just the fiscal policies of the US government that show the dollar is on a downhill slide. 10 year treasury bond rates are becoming erratic. Credit default swaps against a default of the US Treasury have skyrocketed in value in the past year. And yet, the Fed wants to continue creating money out of debt and the Federal Government wants to continue borrowing money.

[robinhood1]

10 year bonds are still trading at very low interest rates. It makes one long for the good old days of 1984 when 10 year bonds yielded around 14%, if you had any money to buy bonds. For people foolish enough to buy 30 year bonds in these times, it may be a case of out of the frying pan and into the fire.

[HowietheScreamer]

Didn't they do away with the 30 year bond in the Bushie admin?

[DesertDogAlpha]

We used to be worried about tax and spend. Now it's just tax the top 5 percent and spend like all 100 percent are paying. And this is the consequence. We all want more than we pay from from Uncle Sugar. If we won't all pay, we can't all spend.

[robinhood1]

Voodoo economics, Democrat style. Too bad they don't have enough courage to pass a comprehensive national sales tax without any Internet exemptions to fund national health insurance and to start paying down the national debt. In California, the state sales tax is levied on vitamin pills but not on junk food or on yachts. Read this to get your exemption on your next yacht purchase:

"California buyers shopping for a new boat who opt for offshore delivery and keep the boat outside of the state for at least 90 days can take advantage of an incredible sales tax exemption.

When legislators finally approved California's state budget Aug. 21 after a 51-day-long impasse, it contained a nice surprise for boaters: the return of a sales tax exemption on the purchase of yachts in California that are delivered offshore. The new provision allows buyers of a boat, plane or recreational vehicle to avoid paying sales tax, as long as they follow specific guidelines and keep it out of the state for at least 90 days after the purchase.

The legal requirements are somewhat complex, so getting the advice of both a tax professional and a yacht delivery firm experienced in offshore deliveries is a must." (from http://www.boatloco.com/california-yacht-sales-tax-exemption-Is-back )

[larry278]

When someone offrs a financial product which is backed by the full faith & credit of the USA, Moodys, the FT & HP have warned you. You buy a financial product at your own risk.

[notAMoron]

It isn't that hard to understand, this country has huge unfunded liabilities in Social Security and Medicare and we have been spending like crazy in Iraq and on worthless crap without exporting enough stuff. We will need to take a decade or so to balance out our trade gap with the world and put our house in order.

GWB was a spendthrift and now we need to cleanup his mistakes, lets get it taken care of before the greedy old geezers who took the money kick the bucket.