Monday, July 25, 2011

U.S. Debt Downgrade Seems Inevitable at This Point

All three major credit-rating firms have threatened to lower their top triple-A rating on U.S. debt if the White House and Congress don't come to an agreement to raise the debt ceiling. We now have a total of eight days to get legislation written and passed, and in any case, the rating agencies will require both spending cuts that seem unreachable, as well as some reasonable assurance that actual will to get spending under control exists.

At the moment, neither of those requirements seems to exist. Get ready: U.S. debt is about to get a historic downgrade.

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