Report: U.S. Barely Ahead of PIIGs
US finances are in almost as troubled a state as the worst-hit members of the euro zone, economists say, underscoring the pressing need for Washington to reach agreement on how to reduce the deficit.
A gauge of “sovereign risk” from economists at Deutsche Bank placed the United States just behind Greece, Ireland and Portugal among 14 advanced economies.
The report, from economists led by Peter Hooper, warned that a failure to make substantial political progress on deficit reduction “would substantially raise the risk of a bond market crisis”.
The warning comes days after Standard & Poor’s said that it may lower its AAA assessment of the US, amid a political log jam over debt reduction in Washington, and will intensify market concerns about Western governments’ debts.
Last night George Papandreou, the Greek Prime Minister, strongly criticised credit rating agencies, saying that they were “seeking to shape our destiny and determine the future of our children”.
Deutsche Bank’s analysis acknowledged that the risk attached by financial markets to US debt remained very low, as demonstrated by the country’s modest borrowing rates. That was in part due to the US dollar remaining the premier reserve currency for world governments.
However, the report noted: “Reputation and reserve currency status can be lost, and failure to move US fiscal policy off its currently unsustainable path would certainly increase the risk.”
For the time being, though, Democrats and Republicans have been mired in mudslinging over the debt ceiling.
Hat tip: The Wall Street Journal
![](http://www.parentalrights.org/vertical/Sites/%7BC49108C5-0630-467E-9B9B-B1FA31A72320%7D/uploads/%7B3EA8D754-D841-4FF4-882C-32895D89991D%7D.PNG")
[1]
Thanks be to Allen.
[2]
Some one is going to have to stand up to the spending. We thought is would be Boehner and the House Republicans. We thought wrong.
[3]
Already said my piece the last two days. But I don’t disagree with the post as offered.
[4]
Zogby: 41/58
http://www.ibopezogby.com/news/2011/04/25/obama-job-approval-41-hits-new-low-2011/
[5]
Any bets on what polling firm will be the first to show Hussein below 40% ?????
Any guesses????
[6]
Actually Harris is at 38% so never mind
[7]
How in the world can we reduce our debt when the other side of the aisle are true believers in deficit spending. Plus they believe that there is more than enough cash, just an issue of more taxation.
The other side is like those on the Titanic that did not believe the ship was sinking.
[8]
Eph,
Any bets of which of the alphabet networks that mention the Harris Poll you referred to in you #6?
[9]
RP – must be WMIA.
[10]
tough work day…just now logging on.
Lets’ see…Muslims are killing Christians, the U.S. is broke (and getting broker), Obama’s working harder each day to destroy America, Trump is still just a headline grabbing moron with bad hair.
Yup, business as usual!
[11]
the NLRB is suing S. Dakota and Arizona over their (gasp!) having laws that guarantee a SECRET BALLOT!!
The NATIONAL Labor Relations Board…supposedly and impartial broker between Labor and Management…is suing two States because they are trying to preserve the sacred American right to cast a vote in private. Ah…but THESE votes are those that determine whether a new Union gets formed. And if the vote is secret, then the Union thugs don’t know who to threaten.
The New America? You betcha!
[12]
A good one at DbD — http://www.daybydaycartoon.com/2011/04/26/#006078
Obama plan indeed.
[13]
splendid, drdog! and utterly accurate!
[14]
affirmation of my continuing thoughts on the debt matter —
MEGAN MCCARDLE: What A Crisis Looks Like: “The real issue starts, not when China starts selling our bonds, but when China stops buying our bonds. As soon as that happens, we’re in big trouble. . . . A lot of people tend to assume that there will be warning signs telling us that we need to get our fiscal house in order: China will slow down its bond purchases, interest rates will gradually rise. But in fact, the lesson of fiscal crises is that the ‘warning signs’ we’re watching for often are the crisis. Unless interest rates increase (or debt buying decrease–which is really the same thing) in a very gradual, orderly fashion, then by the time your interest rates rise, it is already too late to do anything easy; your debt service burden forces you into dramatic fiscal measures, or default. . . . People are willing to lend at decent rates, until suddenly they’re barely willing to lend at all.”
[15]
“We thought is would be Boehner ”
—
No we didn’t .