{"id":836,"date":"2011-04-19T17:23:29","date_gmt":"2011-04-19T17:23:29","guid":{"rendered":"http:\/\/www.itmtrading.com\/blog\/?p=836"},"modified":"2011-04-19T17:23:29","modified_gmt":"2011-04-19T17:23:29","slug":"us-credit-rating-in-jeopardy","status":"publish","type":"post","link":"https:\/\/www.itmtrading.com\/blog\/us-credit-rating-in-jeopardy\/","title":{"rendered":"US Credit Rating in Jeopardy"},"content":{"rendered":"

The US debt has breached $14 trillion for the first time in our nation\u00e2\u20ac\u2122s history and we are about to run our third consecutive year of budget deficits that exceed $1 trillion.\u00c2\u00a0 In fact we are presently on track to run a deficit of over $1.5 trillion this year.\u00c2\u00a0 Our current economy is running on printed paper<\/a> and the rest of the world is well aware of what is going on.<\/p>\n

As a result of our out of control spending the Standard and Poor\u00e2\u20ac\u2122s rating service just downgraded the long-term US sovereign debt outlook to \u00e2\u20ac\u0153negative\u00e2\u20ac\u009d from stable.\u00c2\u00a0 The ratings agency warned that there is a one in three chance that the US credit rating with be lowered from its current rating of AAA within the next few years.\u00c2\u00a0 S&P is not confident that our government will be able to get these deficits and debts under control.<\/p>\n

In addition, the IMF urged the US last week \u00e2\u20ac\u0153to outline credible measures to reduce its budget deficit,\u00e2\u20ac\u009d pressuring the White House to detail plans to ratchet down record debt levels.\u00c2\u00a0 This is in addition to their February announcement about their plan to eventually use the SDR as the new world\u00e2\u20ac\u2122s reserve currency.\u00c2\u00a0 The IMF is saying to the US that the time is now to take action.\u00c2\u00a0 But what are we going to do, cut entitlement programs<\/a> when people need them the most?\u00c2\u00a0 Or cut defense spending while we are involved in two wars and possibly a third with Libya?<\/p>\n

Should the US have its credit rating downgraded, the rates that the US will have to pay to its creditors to borrow money will have to rise dramatically to offset the risk (which we cannot afford).\u00c2\u00a0 Countries aren\u00e2\u20ac\u2122t exactly lining up to buy our debt now.\u00c2\u00a0 The Federal Reserve is currently purchasing 70% of all US Treasuries offered for sale.\u00c2\u00a0 So if the risk is perceived to be even higher, who will come to buy our debt then?\u00c2\u00a0 This posses a serious problem, because the Fed cannot continue to buy our debt indefinitely.<\/p>\n

We can no longer ignore the fact that our country is in a precarious situation.\u00c2\u00a0 If we cannot get our spending under control we are in serious trouble.\u00c2\u00a0 Just the defense spending portion of the budget is close to $900 billion per year which is not likely to be reduced anytime soon, and that is only a portion of the over $3 trillion worth of spending per year.\u00c2\u00a0 That is over $8 billion per day!<\/p>\n

It seems to me that we are at the point of no return.\u00c2\u00a0 We either need to pull out of all wars and get real about what is actually sustainable spending (what can we afford) or watch as the Dollar fades away into the background and we are forced to deal with the issue because the ability to print money has been stripped from us (we lose our status as world\u00e2\u20ac\u2122s reserve currency<\/a>).<\/p>\n","protected":false},"excerpt":{"rendered":"

The US debt has breached $14 trillion for the first time in our nation\u00e2\u20ac\u2122s history and we are about to run […]<\/p>\n","protected":false},"author":6,"featured_media":841,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1207],"tags":[],"class_list":["post-836","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts\/836","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/comments?post=836"}],"version-history":[{"count":0,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts\/836\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/media\/841"}],"wp:attachment":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/media?parent=836"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/categories?post=836"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/tags?post=836"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}