In a recent report the conservative Heritage Foundation postulates that the rising US deficit will impact the United States credit rating…
Geez, where were these guys during Raygun and Bush II?
The credit rating company Standard & Poor’s (S&P) recently lowered the United Kingdom’s debt rating from “stable” to “negative” as its debt-to-GDP ratio approaches 100. On May 21, Bill Gross, the co-chief investment officer of PIMCO, a leading bond trading house, said the U.S. may lose its credit rating as the federal government issues trillions in additional debt.
The consequences of such a development would be significantly higher interest rates facing the U.S. Treasury and possibly throughout the economy. The dangers are real, and an imminent fundamental policy course correction appears inevitable.
So… If the US doesn’t get a payment in between 8 a and 9 am on the 23rd of the month…
Does the Treasury get hit with a $200 billion late fee?
And where were these conservative think tankers when the whole damn economy was…
The article makes these suggestions –
Defending the U.S. Credit Rating
The U.S. credit rating is at risk.
The Obama Administration can and should protect it by taking the following actions:
- Encourage and express firm and unwavering support for the Federal Reserve in its efforts to contain inflation and inflation expectations. These actions will diminish the market’s perception of devaluation risk.
- Dramatically shrink the budget deficit in the near term in such a way as to preserve and strengthen the vitality of the nation’s economy. Specifically, the Administration must abandon its goals of greatly expanded government spending and taxation.Finally, the Administration must match actions to words to rein in entitlement spending and eliminate the threat of future, massive budget deficits.
In other words – go back to the old conservative tax cut and deficit failed mantra.