Debt hysteria
First Trust discussing of the debt ceiling debate:
"Moody’s (the rating agency) has said that the US should get rid of the debt ceiling altogether, but this has it exactly backward. Greece never had this debate and spent its way into oblivion. The debt ceiling could very well keep the US from that fate. Nonetheless, the professional political class (and this includes the ratings agencies), are trying to scare people with a forecast of Armageddon."
More:
"There is absolutely no chance that the United States will 'default' on its debt. Every dime of interest will get paid and every penny of principal will be rolled over. The markets understand this and that’s why the government can still borrow money at 3% or less for 10 years. The US is not Greece, it is not even close. The US does not need Germany and the IMF (like Greece did) to help it pay principal and interest. The US has more than enough tax revenue to pay interest on bonds."
And still more (bravo!):
"Three things about this really bother us. First, where were the rating agencies when spending was ratcheted up so much? Why are they only speaking out now? Second, massive amounts of spending were done in the name of short-term economic stimulus. Forget whether it worked or not – how did this become permanent spending? And third, what about the economy? The huge increase in government spending has hurt the economy, cutting it back will boost growth."
Thanks, Tom.
"Moody’s (the rating agency) has said that the US should get rid of the debt ceiling altogether, but this has it exactly backward. Greece never had this debate and spent its way into oblivion. The debt ceiling could very well keep the US from that fate. Nonetheless, the professional political class (and this includes the ratings agencies), are trying to scare people with a forecast of Armageddon."
More:
"There is absolutely no chance that the United States will 'default' on its debt. Every dime of interest will get paid and every penny of principal will be rolled over. The markets understand this and that’s why the government can still borrow money at 3% or less for 10 years. The US is not Greece, it is not even close. The US does not need Germany and the IMF (like Greece did) to help it pay principal and interest. The US has more than enough tax revenue to pay interest on bonds."
And still more (bravo!):
"Three things about this really bother us. First, where were the rating agencies when spending was ratcheted up so much? Why are they only speaking out now? Second, massive amounts of spending were done in the name of short-term economic stimulus. Forget whether it worked or not – how did this become permanent spending? And third, what about the economy? The huge increase in government spending has hurt the economy, cutting it back will boost growth."
Thanks, Tom.
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