Moody's Sees US Rating Under Pressure After $3.8 Trillion Budget

ZeroHedge Blog ^ | February 2, 2010 | Tyler Durden

[Cheap_Hessian]

If there is one thing the rating agencies can be proud of, it is... well, there isn't one. And if after yesterday's mindboggling budget proposal which sees the deficit increasing to $9 trillion in 10 years, coupled with the fact that GSE liabilities now should be counted as part of overall US obligations, neither S&P nor Moody's could muster enough courage to at least put the US on even the weakest form of downgrade review, one can say that after 2 years of pretending otherwise, both rating agencies are still as [clueless/corrupt] as always. Then one barely visible silver lining, the following disclosure from Moody's in the report released today:

The ratios of general government debt to GDP and to revenue are deteriorating sharply, and after the crisis they are likely to be higher than the ratios of other Aaa-rated countries.If the current upward trend in government debt were to continue and become irreversible, the rating could come under downward pressure. The trend and the outlook would be more important than any particular level of debt.

[cranked]

"Under pressure"? It was already under pressure.....

[OneWingedShark]

If I were them I’d have immediately revised downward the [credit] rating of the US... and by more than one ‘grade’ because the ever-increasing debt ‘ceiling’ is indicative of one thing: The US Government NEVER intends to pay back what it owes.

[unixfox]

Ya think?

[LZ_Bayonet]

"If it becomes "irreversible", the ratings "could" come under pressure? WTF. When it becomes irreversible, it's game over."

- A "comment" on the article

[mamelukesabre]

The more I read about our budgets, the more I think we passed the point of no return 10-20 years ago. The US$ is a dead man walking. How many more steps this dead man can take before dropping like a sack of potatoes is anyone’s guess. Maybe another 20 years.

Let’s look at general motors. GM is WAAAAY smaller than uncle sam. Yet they continued on even after passing the point of no return for what? ten years? So maybe uncle sam can continue the charade for another 40+ years.