From Market Watch:
Moody’s Investors Service said late Wednesday it placed the U.S. government’s triple-A bond rating on review for possible downgrade due to rising risk of default. “The review of the U.S. government’s bond rating is prompted by the possibility that the debt limit will not be raised in time to prevent a missed payment of interest or principal on outstanding bonds and notes. As such, there is a small but rising risk of a short-lived default,” Moody’s said…
This is the global Ruling Class circling the wagons – there is absolutely zero danger that a bondholder won’t get paid. But they are fretful of the precedent – that is, they are worried that we, the people of the United States, will discover that the world won’t end if Uncle Sam stops spending money. That would be pretty much game over for them…once we see it happen, we’ll probably start making all sorts of demands for spending cuts and that could lead just about anywhere – President Palin, balanced budgets, a revived American economy, bitter-clingers ruling the roost…it is all just too terrible to contemplate. So, better try and frighten the yokels…Obama did his bit by claiming old people won’t get their SS, now Moody’s is doing it’s bit by claiming that disaster impends.
Don’t buy the scare tactics and the hype – there is no financial crisis for the United States government. Not yet. That will come some where in 2015 if we don’t cut spending, not in 2011 if we fail to go further in to debt. To be sure, there is a danger of a complete economic melt down – but that will be triggered by China and/or Europe, not by us; and there is nothing we can do to stop any of that, though we could make matters much worse by having more debt than we should when the crash comes. Republicans, conservatives, libertarians – remain calm: stand firm on principal and all will be well.