It’s going to get worse before it gets better

S&P downgraded the U.S. debt rating. And it’s not looking good for the future either:

The outlook on the long-term rating is negative. As our downside alternate fiscal scenario illustrates, a higher public debt trajectory than we currently assume could lead us to lower the long-term rating again. On the other hand, as our upside scenario highlights, if the recommendations of the Congressional Joint Select Committee on Deficit Reduction–independently or coupled with other initiatives, such as the lapsing of the 2001 and 2003 tax cuts for high earners–lead to fiscal consolidation measures beyond the minimum mandated, and we believe they are likely to slow the deterioration of the government’s debt dynamics, the long-term rating could stabilize at ‘AA+’.

And with each downgrade the interest rates increase which makes the debt burden more difficult to bear which makes it more likely another downgrade is coming.

Hope and change just keeps coming.

Mass printing of money is almost for certain in our future. I figure than in another couple years I can probably pay off our mortgage with that half ounce of gold in one of my safes or a few hundred pounds of lentils…

2 thoughts on “It’s going to get worse before it gets better

  1. Good to know that s&p is sucking on the whitehouse laundry list of what the problem is.
    Is this the same s&p thatwas telling us what great buys Bear Sterns and Lehman Bros were right up to the day they both crashed and burned?

  2. I figure than in another couple years I can probably pay off our mortgage with that half ounce of gold in one of my safes or a few hundred pounds of lentils…

    Presuming they don’t change the currency your mortgage is valued in.

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