Debt Disaster Dead Ahead

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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.