The republican-led Congress took a timid step towards responsibility Sunday, for which every politician and lobbyist in D.C. gave themselves credit and applause. The House debated then approved the deal, as did the Senate, and President Obama signed it into law on Tuesday. The credit rating agency Moody’s came back Tuesday with confirmation that the United States retains its Aaa rating with Moody’s, but with a negative outlook. As of this writing, Standard & Poor’s has not released a statement regarding the United States’ AAA/A-1+ rating and the “CreditWatch Negative” alert issued July 18 remains unchanged at this time. For both agencies, the United States enjoys the highest possible rating, on the basis of economic resiliency, financial strength, and susceptibility to event risk. In other words, there remains no concern that the United States will fail to pay its debts, nor that the country will fail to honor its obligations in the foreseeable future, but the amount of debt carried by the United States must be seriously addressed in the coming year, and the plan fulfilled within the decade.
In its most recent release, Moody’s went into some detail regarding its concerns.
The money quote:
Sounds good, but Moody’s goes on:
In other words, we’re still on probation. So what does Moody’s expect from a responsible government?
Gee, that sounds a lot like what the conservatives suggested, doesn’t it? But there’s more from Moody’s:
In other words, government cannot get away with tax hikes that keep unemployment high and hurt business, just because they need to pay down the debt. The only way to get the job done is to make serious spending cuts, revive the economy by keeping government out of the way, and to raise revenue without raising anyone’s tax rate. Again, this what conservatives have proposed all along. Cutting spending reduces the burden and the economy will come back just fine if government will just back off from ridiculous new rules and punitive policies.
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