Moody's warns US of Credit Rating fears

[dogtowner]

and people scoffed when this was predicted

we are rapidly becoming a third world nation with this horrid administration.

Moody’s Investors Service fired off a warning on Wednesday that the triple A sovereign credit rating of the US would come under pressure unless economic growth was more robust than expected or tougher actions were taken to tackle the country’s budget deficit.

In a move that follows intensifying concern among investors over the US deficit, Moody’s said the country faced a trajectory of debt growth that was “clearly continuously upward”.


Steven Hess, senior credit officer at Moody’s, said the deficits projected in the budget outlook presented by the Obama administration outlook this week did not stabilise debt levels in relation to gross domestic product.


“Unless further measures are taken to reduce the budget deficit further or the economy rebounds more vigorously than expected, the federal financial picture as presented in the projections for the next decade will at some point put pressure on the triple A government bond rating,” the rating agency added in an issuer note.


This week, the White House forecast a $1,565bn budget deficit for 2010, which represents 10.6 per cent of gross domestic product and is the highest such ratio of debt to GDP since the second world war.
While the budget gap is forecast to fall to about 4 per cent by 2013, it is based in part on economic growth not falling below government expectations, Congress agreeing to tax rises and a spending freeze on non-security discretionary spending.


Crucially, projections of the overall debt-to-GDP ratio for the US are seen rising from 53 per cent in 2009 to 73 per cent in 2015 and 77 per cent by 2020.


Moody’s, however, says this understates the overall US debt level.

 

[Gipper]

Beck compared our current economic situation with Great Britain's during and after WWI during tonights show. And with China holding much of our debt, things are not going to end well for us.

 

[GenSeneca]

You just know that in the inevitable collapse brought on by the fiscal insanity of growing and maintaining the welfare state, the lefties will blame it all on defense spending and a lack of socialist policies.

 

[dogtowner]

You just know that in the inevitable collapse brought on by the fiscal insanity of growing and maintaining the welfare state, the lefties will blame it all on defense spending and a lack of socialist policies.

Get wrapped up in finger pointing and we become Zimbabwe.

The federal government is spending too much money. Period.

The credit card is maxed...
The 2nd is maxed...
The Payday loan guys won't cash our checks...
and
the loan shark just laughs...

It aint no joke and its not going away making foam rubber to winterize houses.

 

[Pidgey]

How come the House liberals never seem to comment on a thread like this? What about the subject matter is it that they can't seem to find something to say about? Maybe they just don't comprehend the subject line and so never even open 'em up?

Oh, well... if the US gets a credit downgrade, it'll be a lot like a regular person losing a bunch off of his or her FICO credit score and what that does to the cost of getting loans--higher interest rates. That might not be so horrible when you're talking small loans, but it's huge when you're talking trillions of dollars.

 

[GenSeneca]

How come the House liberals never seem to comment on a thread like this?

Do you really have to ask?

 

[Pidgey]

Do you really have to ask?

It was a rhetorical question...

Seriously, Europe's blowing up. Anybody else watching that?