Well, lookie here.
Moody's, best known for "Subprime is AAA," is belatedly coming to the realization that a country running serial deficits of 10% of GDP is not a AAA credit.
Well, admitting you have a problem is the first step. And today, Moody's is admitting what we've been telling you for some time, that the debt ceiling charade is a farce and the real problem is the debt itself.
Read all about it at The Hill.
Moody's says Obama and Geithner are lying about "default," and both the Boehner and Reid plans are completely inadequate to avoid downgrade
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Some good credit rating agency commentary here: http://www.pjtv.com/?cmd=mpg&mpid=113&load=5828
Moody's is only about 20 years too late. Consider the implications of SEC regulation on the "rating agencies". Or CPA firms. Do these "impartial guardians of the numbers" defer to Uncle Sam? Do we want Uncle Sam to regulate them? Did any CPA firm tell us before the 2008 financial crisis that many of our big banks were insolvent? Do they say so now?
The debt is the problem of course. But there is no plan that can pass Congress that will reduce the debt in the short term. What should be done, given the Democrat votes in the Senate.
What should be done is:
- Means-test Social Security and raise the retirement age
- Block grant Medicare
- End the wars in Iraq, Afghanistan, and Libya, and bring the troops home from Germany, Japan, and South Korea
- End the War on Drugs
- Abolish the TSA
- Let Fannie Mae and Freddie Mac fail
- Let Bank of America fail
- Start zero-based budgeting in Washington
Unfortunately, none of that will happen without electing a lot more Rand Pauls to the Senate.
What will happen is still what I said a couple months ago:
Boehner and the Republicans will talk tough all the way to the brink, then fold like a cheap suit and accept a deal that has something like $2 trillion in alleged spending cuts over ten years, all of which will be back-end loaded meaning no significant cuts before Election 2012, and which will not put the country on a fiscally sustainable path.
You raise a good point, that politics is the art of the possible, and yes, this is probably the best deal the Republicans could have gotten without being smeared by the left-wing MSM as being responsible for the inevitable debt downgrade.
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