Downgrading of U.S. Debt “Virtually Inevitable”

A Semi-News/Semi-Satire from AzConservative ^ | 29 July 2011 | John Semmens

[John Semmens]

Standard & Poor President Deven Sharma appeared before a House subcommittee and declared that a downgrade of US Treasury Debt is “virtually inevitable.”

“From an investor’s perspective, whether the debt ceiling is raised, at best, is irrelevant,” Sharma asserted. “After all, it is the United States that is the borrower. A borrower granting himself permission to borrow more money is meaningless if prospective lenders aren’t willing to lend.”

The key factor influencing potential lenders’ willingness to lend, according to Sharma, is the likelihood of repayment. “Current debt obligations and their projected growth under the Obama Administration evince a very palpable risk that US Government revenues will not be sufficient to service that debt,” Sharma observed. “Unless there is an immediate reduction in spending of at least $400 billion per year beginning with fiscal 2012, a downgrade of US Treasury bonds will take place.”

Under a “best case scenario” a downgrade of US Treasuries would add hundreds of billions of dollars to each year’s deficit. Under a “worst case scenario” there might be insufficient buyers for any added debt.

read more...

http://azconserv1.wordpress.com/2011/07/30/democrats-call-for-executive-action-to-resolve-debt-ceiling-crisis/

[sergeantdave]

What’s the bottom line - Uncle Sugar and his den of thieves get their credit card taken away?

[muawiyah]

Br'r Sharma is just another employee of McGraw Hill, a publisher of the following magazines:

Architectural Record

Aviation Week & Space Technology

Business & Commercial Aviation

Businessweek

Detail on Retail

Engineering News-Record (ENR)

GreenSource Magazine

Harvard Business Review

InformationWeek

MSDN Magazine

Overhaul & Maintenance

Platts Coal Outlook

Platts Electric Power Daily

Platts Electric Utility Week

Platts Energy Economist

Platts Energy in East Europe

Platts Energy Trader

Platts EU Energy

Platts European Gas Daily

Platts European Power Daily

Platts Gas Daily

Platts Global Power Report

Platts Inside Energy

Platts Inside FERC

Platts Inside FERC Gas Market Report

Platts Inside NRC

Platts International Coal Report

Platts International Gas Report

Platts LNG Daily

Platts Megawatt Daily

Platts Metals Week

Platts Nuclear Fuel

Platts Nucleonics Week

Platts Oilgram News

Platts Oilgram Price Report

Platts Power in Asia

Platts Power in Europe

Platts Refiner

Platts Renewable Energy Report

Platts US MarketScan

Power

Technology Review

[familyop]

"What’s the bottom line - Uncle Sugar and his den of thieves get their credit card taken away?"

Eventually. They'll steal just about everything else first, though. I doubt that they're much different from those who've done the same in other defaulting banana republics. Local governments, very dependent on federal funding, have already unveiled a few socialist surprises.

[familyop]

BTW, the default process may be scoffed at, but it’s real. It’s going to happen.

[Mycroft Holmes]

Good thing I went to the article. I couldn’t find any satire in the excerpt and in this tsunami of financial band news I was hoping for some teardrop of humor. Thanks John.

[Mycroft Holmes]

Good thing I went to the article. I couldn’t find any satire in the excerpt and in this tsunami of financial bad news I was hoping for some teardrop of humor. Thanks John.

[bruinbirdman]

"Eventually. They'll steal just about everything else first, though."

And without a congressional vote but by executive fiat..

I can just see those commies plotting away while GW was in office. "How the next socialist president can usurp power through the regulatory authority already handed over by congress.

The first thing they did was nationalize 1/2 the auto industry by executive authority.

Then they nationalized 95% of the mortgage industry through HUD, Treasury, and Commerce.

Then they cut off future energy production.

The Commies nationalized the health industry after they had been kicked out of Congress.

The list goes on.

Confiscating wealth can take many forms. The most significant is by making existing property worthless by regulation.

yitbos

[familyop]

"I can just see those commies plotting away while GW was in office. "How the next socialist president can usurp power through the regulatory authority already handed over by congress."

Yes, and many fail to see the effects of that kind of policy even now.

"Confiscating wealth can take many forms. The most significant is by making existing property worthless by regulation."

I've even seen that happen with rural residential real estate. The more they regulate to send remote property values up, the more values fall. Too many were overpriced and over-mortgaged.