Downgrade This!!!

While Standard & Poor’s downgrade of US federal government debt attracted the most attention, other US rating agencies have done the same:

Weiss Ratings assigned a “C” before downgrading to “C-minus” (equivalent to notch above “junk” status in S&P rating).

Egan-Jones Ratings downgraded US federal government debt from AAA to AA+ & put it on negative ratings watch. (It is one of a few rating agencies that the SEC designates as “Nationally Recognized Statistical Rating Organization”)

And China’s Dagong Global cut credit rating on US sovereign debt to A from A+ & put US on negative outlook. This rating is 5 notches below Triple-A & puts US at same level as Russia. (This has dubious value since it gives China a AAA rating!)

Clearly the outlook on US federal government debt credit reflects the relatively-high level of debt combined with an inability to make significant cuts in spending. And the combination of slow economic growth, high fiscal deficits & rising debt dependency undermine the ability of the US federal government to repay its debts.

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About christopher

Content of "Natural Order" attempts to reflect the commitment of Universidad Francisco Marroquin to support the development of a society of free & responsible individuals. The principal commentator for this blog is Christopher Lingle.

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