Note how Moody’s presents their statement:
“If the debt limit is raised and default avoided, the Aaa rating will be maintained,” says the press release. “However, the rating outlook will depend on the outcome of negotiations on deficit reduction. A credible agreement on substantial deficit reduction would support a continued stable outlook; lack of such an agreement could prompt Moody’s to change its outlook to negative on the Aaa rating.”
They’re not saying that raising the debt ceiling will take care of our credit rating. Moody’s is saying, clearly, that deficit reduction is the key to “a continued stable outlook.” And which party has shown any seriousness at all about tackling deficit reduction?
This may be the strongest signal yet that the financial markets are finding Obamanomics to be literally unbearable.
I’m fairly certain only the first line will inform the administration. The rest will by downplayed, if not willfully ignored. To them “deficit reduction” is an oxymoron.
If Moody’s cuts their ratings for US T-bonds then deficits will stop when no money can be borrowed at any interest rate. Additionally, $14 T of outstanding debt becomes effectively due immediately. That means Grandma dies when her Medicare card can no longer be used at a local hospital. It means poor people starve when their EBT accounts stop being replenished. Moody’s doesn’t care about the most disadvantaged members of society…
Lowering the credit rating won’t change the realities of of ideological politics in Washington between the principle parties over national spending and debt.
Our nation has a very long history of loaning money to countries with low or no credit rating, trying to collect it, leaving it on the books and sometimes forgiving it…..all while loaning the same countries more and more money. Sadly, they know the reality, that if more loans are needed, it will repeatedly come from some source(s)….and all this public theatrics will continue….for a little awhile until folks become bored with it. All its taken this past week, is Congressman Weiners uderwear and percieved weenie, to distract millions of peoples attention away from the economic crisis.