Sunday, August 7, 2011

On the S&P Creditworthiness Downgrade...

FIRST, READ THE ACTUAL DOCUMENT:

http://www.washingtonpost.com/​wp-srv/politics/documents/spra​tingreport_080611.pdf

It nets out to a political decision wherein S&P comes down on the side of those who want to "reduce entitlements" and without mention of the 1 Trillion lb gorilla in the budget - the military and prison complexes - as they talk about "debt trajectories."

From the S&P document explaining their downgrade of US securities:

"When comparing the U.S. to sovereigns with 'AAA' long-term ratings that we view as relevant peers--Canada, France, Germany, and the U.K.--we also observe, based on our base case scenarios for each, that the trajectory of the U.S.'s net public debt is diverging from the others. Including the U.S., we estimate that these five sovereigns will have net general government debt to GDP ratios this year ranging from 34% (Canada) to 80% (the U.K.), with the U.S. debt burden at 74%. By 2015, we project that their net public debt to GDP ratios will range between 30% (lowest, Canada) and 83% (highest, France), with the U.S. debt burden at 79%..."

Note that, in this list, the comparison countries have single payer healthcare and other "entitlements" that pale the US equivalents. What they DON'T have is the US military and prison industrial complexes.