Friday, April 02, 2010

Debt Disaster Dead Ahead

When the credit rating agency Moody’s announced recently that the United States had moved “substantially” closer to losing its AAA bond rating, it largely ran as a wire brief, buried in newspaper business sections. But this obscure announcement may one day be regarded as the beginning of the end of American prosperity. Now, I know what you might be thinking: Moody’s was late on the subprime mortgage crisis, failing to lower ratings for companies with subprime-heavy portfolios until it was too late. But, if anything, that should make everyone more nervous. If the bean-counters at Moody’s are starting to get anxious, things may be far worse than we imagine.