Tuesday, June 23, 2009

US Government AAA Rating, Growing Debt and Big Worries Ahead

Don’t have much time for blogging today but I encourage you to read the article U.S. credit rating a "solid triple-A": Moody's that came out this morning. In spite of its upbeat title, the article says that Moody’s acknowledges that the US “government’s triple-A credit rating was safe but ... could be at risk if Washington were unable to bring its public debt back to a downward trajectory”.

The U.S. national debt is fast approaching $12 trillion, or more than $37,000 per capita (see U.S. Debt Clock). Moreover, unfunded liabilities are almost $58 trillion; soon to be $200,000 per capita.

I wonder how Washington will bring the debt to “a downward trajectory”. If this can't be addressed, this is bad news for the US dollar and US interest rates. Be worried!

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