“I think one thing we’re going learn as a result of the downgrade is the realization that the debt situation will prove to be far worse than even S&P can imagine.”
I agree. Government accounting is deliberately deceptive. Low inflation and interest rates mask much of the debt. Inflation will trigger large increases in government spending for COLAs. There is no accounting for the wave of soft defaults in student loans, Obamacare costs, unemployment compensation costs, and many other programs. The debt does not recognize the incredible barrage of future spending in traditonal entitlement programs and new entitlement programs. In addition, the regulatory barrage has been a major reason for the economic malaise. Capital is moving to other countries with more reasonable business climates especially for hiring of white collar workers. The financial services industry will dramatically shrink in this country as a result of Dodd-Frank.
And then there is Obamacare...a financial disaster of epic proportions in the making. Obamacare is going to be like the proverbial “money pit” if its not struck down by the USSC.