Let me be perfectly blunt. Anyone who buys U. S. Government bonds in the notion that they are as secure as an alertly rated AAA Corporate Bond from a country with sounder monetary policy, is naive in the extreme. With the Keynesian monetization of the out of control Federal debt, the only question is how soon, the purchaser takes a terrible bath.
I suspect, that were it not for fear of the rancor they might expect from the political establishment, the rating agencies would long ago have dropped the triple A rating to something far lower. The rhetoric coming out of the Administration on the subject is designed to panic people who simply do not recognize from whence comes the real threat, or the extent of what those in this Administration have already achieved in destroying the wealth of rooted Americans.
As for the Administration's argument on taxation, note how much damage has already been done to American reserves by a Capital Gains Tax, not indexed to inflation: Capital "Gains".
The Founding Fathers would clearly have deemed this stealing. So do I.
William Flax
I think you’re right. The US will lose its AAA rating when those required to purchase AA bonds no longer want to purchase US bonds.
I posted a thread yesterday that there are two scenarios where we retain our rating. One is a short term Republican lead sprint to get the deficit down. The other is a longer term bipartisan agreement to get the debt down.