The assessment of each was harsh but the US was singled out in particular:
For the four largest Aaa countries — France, Germany, the UK and the US — these paths show little change from those analyzed by Moody’s last August. Looking beyond the near-term evolution of their credit metrics, Moody’s emphasizes that all four countries face dramatic increases under their existing policy commitments arising from ageing-related pension and healthcare subsidies. These future costs must be brought under control if these countries are to maintain long-term stability in their debt burden credit metrics.
The political consequences are such that Congress is unlikely to do anything, even if the US eventually loses it Aaa rating. No one dares suggest changes in the basic structure of Social Security, Medicare, and Medicaid.
Douglas A. McIntyre
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