Posted on 05/24/2012 3:17:05 PM PDT by Kaslin
I hate that I feel compelled to say it, but the gentleman most definitely has a point. Some words of wisdom from Sen. Tom Coburn (R-Okla.): Coburn: U.S. "should see another downgrade"
"S&P's downgrade on us was right, matter of fact we're going to get another downgrade. I can tell you right now, you can have a great legal case for suing the rating agencies for not downgrading us again because we have not demonstrated the political will to solve the problems," said Coburn on CBS's midweek show "Face to Face," posted online Wednesday. ..."We should see another downgrade, because we have not done the structural things that will fix our country," he added. ...
When asked if he agreed with Boehner's decision to push forward the tumultuous debt-ceiling debate, Coburn said, "I think that's exactly what our founders had in mind." ...
"Those are all things people don't want to hear, but it's going to happen, because if we don't do it, the people who are loaning us the money are going to make us do it," he said.
Coburn is essentially saying that last summer's downgrade, which took our credit rating from AAA down to AA+ for the first time ever, was pretty much our just desert. We've had the ability to foresee the consequences of our metastisizing federal government's spending binge for ages, and we have failed to summon the political will it's going to take to effect real change in Washington. The United States creditworthiness is still a better bet relative to lots of other countries, but we're going the way of Greece -- and fast.
I think there’s ample cause for down-grading to a B rating: we haven’t had a budget passed since Obama came into office, and that isn’t even considering an actual we-aren’t-spending-what-we-aren’t-making budget.
The general meaning of our credit rating opinions is summarized below.
‘AAA’—Extremely strong capacity to meet financial commitments. Highest Rating.
‘AA’—Very strong capacity to meet financial commitments.
‘A’—Strong capacity to meet financial commitments, but somewhat susceptible to adverse economic conditions and changes in circumstances.
‘BBB’—Adequate capacity to meet financial commitments, but more subject to adverse economic conditions.
‘BBB-‘—Considered lowest investment grade by market participants.
‘BB+’—Considered highest speculative grade by market participants.
‘BB’—Less vulnerable in the near-term but faces major ongoing uncertainties to adverse business, financial and economic conditions.
‘B’—More vulnerable to adverse business, financial and economic conditions but currently has the capacity to meet financial commitments.
‘CCC’—Currently vulnerable and dependent on favorable business, financial and economic conditions to meet financial commitments.
‘CC’—Currently highly vulnerable.
‘C’—Currently highly vulnerable obligations and other defined circumstances.
‘D’—Payment default on financial commitments.
From: http://www.standardandpoors.com/ratings/definitions-and-faqs/en/us
The whole treasury market is a Ponzi-scheme. The government is admitting that unless it takes on new debt (by raising the debt ceiling) it wont be able to pay back previous debt.
Yeah that sucks.
Now go pay your taxes - your government is broke. :)
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