Join the Meeting Place for Moms!
Talk to other moms, share advice, and have fun!

(minimum 6 characters)

3 Bumps

Moody's in Obama Pocket

So now the company who is threatening to downgrade the USA credit rating is giving advice.  Would a "fiscal rule" help keep our deficit in check?     Personally?  That's laughable.

The United States should do away with the debt ceiling altogether to bring greater certainty to investors in U.S. Treasury bonds, Moody’s suggested Monday.

With the August 2 deadline for raising the debt ceiling barely more than two weeks away, the bond-rating agency issued a report Monday noting that the U.S. is one of just a few countries that has a statutory borrowing limit and saying that the limit creates “periodic uncertainty” for investors, Reuters reported.  Moody’s threatened last week to downgrade the AAA rating of the U.S. government if it is unable to meet its debt obligations next month and perhaps even if Congress and the White House are able to reach a deal. In the past, Moody’s has considered the risk of U.S. default on its debts very low because Congress has routinely approved hikes to the debt limit, but with negotiations between President Barack Obama and congressional Republicans at an impasse, the agency is less confident. “The current wide divisions between the House of Representatives and the Obama administration over the debt limit creates a high level of uncertainty and causes us to raise our assessment of event risk,” analyst Steven Hess wrote in the report. But, he said, “We would reduce our assessment of event risk if the government changed its framework for managing government debt to lessen or eliminate that uncertainty.” Rather than continuing to use the debt ceiling in an effort to keep U.S. borrowing down, the government should look toward Chile, Moody’s suggested. There, “the level of deficits is constrained by a ‘fiscal rule,’ which means the rise in debt is constrained though not technically limited.” Chile is considered to be Latin America’s most fiscally sound country. And, the report noted, it’s not like the debt ceiling has been effective in keeping U.S. debt down: Congress has in the past raised it often and has not linked it to spending levels.

Answer Question
 
itsmesteph11

Asked by itsmesteph11 at 3:32 PM on Jul. 18, 2011 in Politics & Current Events

Level 39 (113,405 Credits)
Answers (9)
  • The US is like a teenager with a credit card.... Even though they don't have a job or any thoughts of ever paying it back, its ok I'll max it out on a shopping spree because I can. US government is equal, its ok, lets just make sure there is no limit to our spending and all will be ok and we won't lose our rating!! We will never be able to pay anything back so just keep lending to us, it makes you all look good!

    amazinggrace83

    Answer by amazinggrace83 at 3:49 PM on Jul. 18, 2011

  • "The United States should do away with the debt ceiling altogether to bring greater certainty to investors in U.S. Treasury bonds, Moody’s suggested Monday."


    OMG, that is SCARY!!!!

    grlygrlz2

    Answer by grlygrlz2 at 3:49 PM on Jul. 18, 2011

  • Weiss has already downgraded the US to near junk status, others may soon follow.
    Carpy

    Answer by Carpy at 3:56 PM on Jul. 18, 2011

  • going crazy


    it's all good, no worries, (infinite sarcasm), this makes me think of that old song, "we're on the highway to hell"~

    agentwanda

    Answer by agentwanda at 4:39 PM on Jul. 18, 2011

  • Seriously? What morons. I wonder what they are getting in return.
    yourspecialkid

    Answer by yourspecialkid at 5:27 PM on Jul. 18, 2011

  • Moody`s is hardly in Obama`s pocket. The rating agencies are in fact owned by consortia of US banks and finance houses which are not the most favourably disposed to the administration because or re-regulation following the financial collapse .

    Having said that and having already had a very , very big shock from the financial collapse, one thing the banking and finance industry does need to function, regardless of regulation , is financial, social and economic stability . Which is why whe push comes to shove , they will not support the extreme right - wing agenda which is a recipe for economic disaster .

    Which is why Moody is taking the attitude it is . No specialkid, they are not morons . it is self interest . Start learning about the real world instead of sitting anchored to Fox News , Bachmann , Paul and the like.

    janet116

    Answer by janet116 at 7:01 PM on Jul. 18, 2011

  • LOL @ janet! Please oh great one tell us about YOUR portfolio. Please tell us about YOUR career in the banking industry. LMAO...you don't know anything about me! Oh and yes....their statements are MORONIC and aired in the right place will shake investor confidence even more. Maybe you should stick to Canadian financials and let Americans deal with their own.
    yourspecialkid

    Answer by yourspecialkid at 9:33 AM on Jul. 19, 2011

  • How is any of that evidence that Moody's is in Obamas pocket? Sounds like you just don't like what they had to say so you're blaming it on Obama.
    UpSheRises

    Answer by UpSheRises at 10:13 AM on Jul. 19, 2011

  • Which is why Moody is taking the attitude it is . No specialkid, they are not morons . it is self interest . Start learning about the real world instead of sitting anchored to Fox News , Bachmann , Paul and the like.


    The same Fox news you lied about the other day.lol
    Anonymous

    Answer by Anonymous at 11:05 AM on Jul. 19, 2011

Join CafeMom now to contribute your answer and become part of our community. It's free and takes just a minute.