Triple A Rating Is Not Forever: Moody's and S&P Warn of U.S. Debt Downgrade
By Howard Davis
Good News magazine writer, Portland, Oregon
Posted January 20, 2011
In just the last minute, the U.S. Debt Clock.org website showed the U.S. national debt increasing $1,400,000 and change—the digits fly by so fast they blur in front of my eyes. They not only boggle the brain, but the numbers seem meaningless as I sip coffee at my neighborhood Starbucks looking at a sea of late model cars in the parking lot.
The numbers dizzily flash upward. Debt per citizen: $44,998. Debt per taxpayer: $126,844, with $1.331776750 trillion added this year alone to the national debt.
Surrounded by global brand name stores beyond the parking lot, I watch the numbers mount up on the world's biggest name brand—the United States of America—as it lunges toward the greatest bankruptcy in history.
It could change. The U.S. people and their leaders could make the sacrifices needed to turn things around. But there is nothing so far—beyond rhetoric—indicating that the government will do what would be necessary.
But if the U.S. government doesn't change its gargantuan deficit spending, its credit rating could be downgraded in the next two years, according to senior spokespeople for Moody's and Standard and Poor's. Both are the world's leading credit rating agencies. They determine whether investors will buy the debt bonds of nations throughout the world and at what interest rates.
"We have become increasingly clear about the fact that if there are not offsetting measures to reverse the deterioration in negative fundamentals in the U.S., the likelihood of a negative outlook over the next two years will increase," said Sarah Carlson, senior analyst at Moody's.
If the rating is lowered, experts agree there would likely be a wholesale departure from U.S. debt, which means the United States could see a collapse of the dollar. This could quickly cause the global financial structure to explode or, just as dire for the United States, it could force all the rest of the world's leaders to quickly construct a new financial structure without the United States.
Then, all America's debt numbers would grind to a halt. The creditors would foreclose.
For analysis of the prophetic implications of the U.S. debt crisis, see "Debt Troubles Mount for Britain and America" and "Could the Dollar Fall?" here http://www.ucg.org/commentary/triple-a-rating-not-forever-moody-sp-united-states-debt.htm?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+GoodNewsMagazine+%28Good+News+Magazine%29
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