Behind Belgium?

With Washington doing all it can to prove that borrowed money is the answer, is it any wonder that others are asking questions, as Institutional Investor suggests in "U.S. Creditworthiness Hits Record Low"?

The latest U.S. government budget projects a staggering deficit of $1.75 trillion this year, and publicly held debt is expected to expand by $9.57 trillion, to $15.37 trillion, over the next decade.

But as the U.S. governmentment commits its full faith and credit to stemming financial panic and restoring the nation's economy -- and by extension that of the world -- to vigorous health, its standing in the eyues of investors is plumbing unprecedented depths.

As revealed in the semiannual Institutional Investor Country Credit survey, the U.S. sees its creditworthiness drop by 5.0 points, to 88.0, on a scale of zero to 100. It now ranks No. 15 among the 177 countries in the survey, one place behind Belgium, a debt-plagued and barely governable state that might cease to exist if Flemish and French-speaking separatists had their way.

To read the rest of the article (and to see the credit rankings for all 177 countries), click here.

Comments

[Jeff]

How you know Rome is burning is if 10Y moves above 4.50% in this type of recessionary/depressionary environment and the dollar starts to decline against the global basket. Till then the credit rating of the nation is intact. The yield of 2.98% on the ten year speaks for itself.
http://thegreatloanblog.blogspot.com

[Martin, the Netherlands]

I was pleased to see that the Netherlands kept their 5th place. Apparently, it was a good thing we lost the 1830 war (in which we lost Belgium).

[dearieme]

The food is better in Belgium too.

[Tom U]

And so it turns out the great wealth engine of America is not its superior brand of capitalism. It's it national addiction to borrow other people's money, including borrowing from its own endless Federal Reserve printing machine. Suddenly the free money cannot be made so freely anymore - the credit crisis. The perpetual dollar machine has some friction. And the whole economy grinds to a halt. And even now, the country does not know that the dollar machine is broken and tries to restart it, so that the fake good life can return. I know, it is sad that a country of so many people can be so dumb.

[Rocky]

So when will US government bonds be downgraded to AA or lower? If the country runs high deficits in good times and even higher deficits in bad ones, it is not a good sign.