S&P gave the US fair warning when it took away the country’s AAA rating. And, the credit rating agency said that America could not sustain massive budgets and continue to borrow capital at the current pace, and at current low rates. The US has been lucky over the last several months, as yields Treasuries have stayed low because of the flight to safety caused largely be the crisis in Europe.
S&P repeated its admonition again today on a webcast for clients
According to Bloomberg
John Chambers of Standard & Poor’s, managing director of sovereign rating said,
“What the U.S. needs is not so much a short-term fiscal tightening, but it has to have a credible medium-term fiscal plan. That is going to have to say something about entitlements, and that is probably going to have to say something about revenues.”
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