Future shock - One of the inconspicuous strengths of the U.S. economy has been the ability to borrow a large amount of money based on superior credit. But due to the massive unfunded liabilities of entitlement spending, Moody's is warning that U.S. Treasury securities could be downgraded: "Moody's Investors Service said on Thursday the United States' "triple-A" government bond rating could come under pressure in the very long-term if the Medicare and Social Security programs are not reformed."
On a related debt note, this month's Atlantic sounds the warning over the Chinese subsidizing our economy: "The Chinese are subsidizing the American way of life. Are we playing them for suckers - or are they playing us?" It's all fun and games until somebody starts cashing in their T-bills.
Extra - AKP: "America, the bad credit risk"
7 comments:
President Hillary is only the first farewell gift bequeathed to the United States by George W. Bush. This story will be the last.
What "story?" That the U.S. bond rating will be downgraded or that Bush was the only president to seriously address entitlement reform (much to his political liability)?
Can't wait to see what President Hillary does.
"Can't wait to see what President Hillary does."
First, she'll blame everything anyone doesn't like on Bush. (Oh, wait. Shes already does that and she's not even elected.)
Well, first, she'll get a huge commission together of *all* the various points of view (everything from the Nutcase Left to the Really Far Out Left. You know, the entire spectrum of political thought.) Then she'll find the only answer is way higher taxes and much, much, much bigger government.
Personally, I don't really want to see this at all, but I suppose waiting to see it is better than the actuality.
Right, Dave. And then she'll run off a cliff, but she won't notice at first. Then she'll stop in midair, look nervous, and reach down to feel for the ground. Only then will she plummet. When she hits the ground, she'll turn round and flat like a manhole cover.
Or at least that's what your cartoon version of Hillary Clinton will do. Th-th-th-that's all, folks!
As for Eric's question, the "story" is Bush putting the U.S. in hock to the Chinese government, by combining a trillion-dollar tax giveback to the rich with gigantic military expenditures. Which makes the oil industry more profitable, but doesn't do much for the United States' longterm economic health.
Bush squandered the surplus he was given, and ran up the largest deficit in American history. Approximately 97% of that deficit is financed by overseas investors.
But he did try and fail to deliver Social Security to the tender mercies of Wall Street. The personal glory of that attempt will surely counterbalance Bush's historic heedlessness.
I can't recall the exact quote, but a wise man once said that if I owed you a few thousand dollars and couldn't pay, that's my problem, but if I owed you a few million dollars and couldn't pay, that's your problem."
Think about that in the context of billions.
However, none of this concerns me. The Japanese were going to own us in the 80's, if you recall, and look how that turned out.
"None of this concerns me." Relevantly phrased. They'll chisel that motto into the granite base of The Bush Memorial.
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