U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Politics and Other Controversies
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Old 12-10-2009, 12:16 PM
23 posts, read 20,159 times
Reputation: 17


On December 8th, 2009, the Credit Rating Agency Moody’s stated that (http://www.foxbusiness.com/story/markets/economy/moodys-warns-face-downgrade-long-term/ - broken link), “The United States, along with 16 other countries, could lose their Triple-A credit rating if fiscal deficits and heavy debts are not effectively managed.” While the group stressed that the threat is not immediate, it did point out that a downgrade could come as early as 2013 if the nation’s fiscal position does not improve.

The report added (http://news.yahoo.com/s/afp/20091208/bs_afp/britainfinanceeconomybudgetforexratingsbondsmoodys - broken link), “The currently abnormally low interest rates are unlikely to last, and will be replaced by higher interest rates that will affect the affordability of the much larger debt burdens that some AAA governments now carry.” Should the United States lose its AAA rating, it could have numerous negative consequences. Interest rates could increase, which will increase the cost of borrowing, there might be a large outflow of investment, as some global funds are only allowed to invest in AAA rated countries, and it could threaten the dollar as the main global reserve currency.

It is important to note that while Moody’s sees the current situation as testing the AAA credit rating, they also point out that in their estimation the United States has an “adequate reaction capacity” to overcome and reverse the problem.

Moody’s said the pace and sustainability of the economic growth and the path of interest rates will be key if countries can manage their significant debt burdens that have built up as they increased spending in the recession and bailed out banks, while the slow economy dried up tax revenues. Let us hope that the government heeds the warning signs and works to get America’s financial situation back on track.

To see more, visit the Pelican Institute for Public Policy. (http://www.pelicaninstitute.org/home/ - broken link)
Rate this post positively Reply With Quote Quick reply to this message

Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Politics and Other Controversies
Similar Threads

All times are GMT -6. The time now is 04:56 PM.

© 2005-2022, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top