Thursday, September 25, 2008

One of the consequences of the impending Government Sell-Out of the American people...

... is that it may cost the United States its AAA credit rating.

From Newshoggers:

One of the fundamental assumptions in finance is that the United States government debt is functionally risk free and that its AAA rating really is AAA rating. We have built that reputation for being good debtors because the US government has never defaulted on its debt. Furthermore while the absolute size of the debt is huge, most of the fiscal analysis ratios are not significantly troubling even though recent trend lines on the current account deficit are worrying over the intermediate term.

However, the US government has engaged in a massive increase in its explicit liabilities in the past three weeks. We are now responsible for most of the US mortgage market, the largest insurer and bits and pieces of many other things that are bundled up in the MBS and ABS that we are bailing out. The AAA rating may be at risk....

Quoting the Globe and Mail:

Rating agency Standard & Poor's warned that the spending spree is beginning to endanger the prized “AAA” credit rating that allows the U.S. government to borrow at low rates from the rest of the world.

AAA Credit rating drops to AA or A and the interest on the national debt (which just got a trillion dollars bigger) goes through the roof.

Thanks, guys.

My children and my grandson really appreciate the hell out of this.

1 comment:

Anonymous said...

Please call Carper, Biden, and Castle. Tell them why the problem occurred (easy money from the Fed), why you won't blame them if they do nothing while the economy goes sour, why it would be bad to pass this Un-American legislation (dollar plummets, bad decisions get reinforced, sick economy gets worse), and what to do instead (cut spending/taxes, get rid of Fed, pass Ron Paul's Honest Money Act, etc.). God bless.