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Milton J. Madison - An American Refugee Now Living in China, Where Liberty is Ascending

Federalism, Free Markets and the Liberty To Let One's Mind Wander. I Am Very Worried About the Fate of Liberty in the USA, Where Government is Taking people's Lives ____________________________________________________________________________________________ "Extremism in defense of liberty is no vice. Tolerance in the face of tyranny is no virtue." -Barry Goldwater-

Friday, January 14, 2011

S&P, Moody's Warn On U.S. Credit Rating - WSJ.com

The post WWII demographics and free economies have allowed Western nations to indulge in an orgy of government spending. Additionally, these nations have promised massive transfer payments to workers later in life indulging in covering retirement payments and medical care without actually saving the money to perform these tasks. Additionally, these nations have not only promised huge payments in the future, they have also spent much more than they take in on taxes and have run up massive deficits. These factors are conspiring to weaken the finances of these nations and they will eventually be restricted from continuing to borrow like they have in the past. As explained by these rating agencies....
In its report, Moody's said the U.S., Germany, France and the U.K. still have debt metrics compatible with their Aaa ratings.

But all four countries must bring future costs of pension and health-care subsidies under control if they "are to maintain long-term stability in their debt-burden credit metrics," Moody's said in its regular Aaa Sovereign Monitor report.

These measures of the U.S. debt burden include federal debt to revenue, estimated to average 397% of gross domestic product until 2020. The ratio of interest to revenue, meanwhile, is expected to rise to 17.6% by 2020, nearly double last year's level. These are "quite high for an Aaa-rated country," Moody's said in its report.

S&P, Moody's Warn On U.S. Credit Rating - WSJ.com


At 9:31 AM, Anonymous Anonymous said...

Easy problem to fix. Just need to print more money....problem solved


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