Comments on: US credit rating could drop within 10 years http://www.savings-bond-advisor.com/us-credit-rating-could-drop-within-10-years/ Mon, 15 Mar 2010 20:50:04 +0000 http://wordpress.org/?v=2.0.4 by: Tom Adams http://www.savings-bond-advisor.com/us-credit-rating-could-drop-within-10-years/#comment-491 Fri, 30 Jun 2006 17:08:43 +0000 http://www.savings-bond-advisor.com/us-credit-rating-could-drop-within-10-years/#comment-491 Mario - What you thought is what I thought. It's what we all learned in Economics 101. That's why the S&P report is such a shocker. To be fair, the report does say: "In reality, it is highly unlikely that governments will allow debt and deficit burdens to spiral out of control. Once governments are confronted with unsustainably rising debt burdens they do react, however reluctantly, by tightening the fiscal stance and/or reforming expenditure programs." Nonetheless, fiscal responsiblity is a rational issue and we elect leaders for emotional, not rational, reasons. So the news from Washington is all about emotional issues like flag-burning instead of rational issues like fiscal responsibility. Mario - What you thought is what I thought. It's what we all learned in Economics 101. That's why the S&P report is such a shocker.

To be fair, the report does say: "In reality, it is highly unlikely that governments will allow debt and deficit burdens to spiral out of control. Once governments are confronted with unsustainably rising debt burdens they do react, however reluctantly, by tightening the fiscal stance and/or reforming expenditure programs."

Nonetheless, fiscal responsiblity is a rational issue and we elect leaders for emotional, not rational, reasons. So the news from Washington is all about emotional issues like flag-burning instead of rational issues like fiscal responsibility.

]]> by: Dan http://www.savings-bond-advisor.com/us-credit-rating-could-drop-within-10-years/#comment-490 Fri, 30 Jun 2006 14:50:22 +0000 http://www.savings-bond-advisor.com/us-credit-rating-could-drop-within-10-years/#comment-490 Possible bright side - maybe this will mean higher interest on Treasury securities to go along with the higher credit risk? (not holding my breath...) Possible bright side - maybe this will mean higher interest on Treasury securities to go along with the higher credit risk? (not holding my breath…)

]]> by: Mario http://www.savings-bond-advisor.com/us-credit-rating-could-drop-within-10-years/#comment-489 Fri, 30 Jun 2006 03:09:24 +0000 http://www.savings-bond-advisor.com/us-credit-rating-could-drop-within-10-years/#comment-489 I was under the impression that the government cannot default on its loans by definition? Because they can always raise taxes and/or print more money? Or is this view too simplistic? I was under the impression that the government cannot default on its loans by definition? Because they can always raise taxes and/or print more money? Or is this view too simplistic?

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