Moody's to Cut U.S. Rating?

The game becomes deadly serious -

Moody's warned Monday that it could move a step closer to cutting the U.S. Aaa rating if President Obama's tax and unemployment benefit package becomes law.

The plan agreed to by President Obama and Republican leaders last week could push up debt levels, increasing the likelihood of a negative outlook on the United States rating in the coming two years, the ratings agency said.

A negative outlook, if adopted, would make a rating cut more likely over the following 12-to-18 months.

For the United States, a loss of the top Aaa rating, reduce the appeal of U.S. Treasuries, which currently rank as among the world's safest investments.

"From a credit perspective, the negative effects on government finance are likely to outweigh the positive effects of higher economic growth," Moody's analyst Steven Hess said in a report sent late on Sunday.

After Obama announced his plan, Treasury prices fell sharply in volatile trade last week and yields have hit a six-month high, in part due to concerns over the effect the package will have on government debt levels.

If the bill becomes law, it will "adversely affect the federal government budget deficit and debt level," Moody's said. 

The Real Effect
Like an avalanche, the U.S. debt situation is reaching an untenable position. The arrogance of not only the Federal government, but its people as well is incredible. The position that is continually put out by many is that the U.S. can't go bankrupt.

While the reality is that the U.S. is already bankrupt, there is a modicum of truthiness in the statement that it can't go bankrupt or perhaps more succinctly - The government won't allow themselves to declare bankruptcy. In some ways, who blames them? Would you want to be known as the individual that was running the show when things blew up? I don't think there are many who would. But regardless of how we feel about the situation, reality must be confronted.

The biggest issue facing this country is our level of national debt and the percentage of that is the odious debt that is owed to the insolvent banking cartel. This debt must be repudiated. First, it is not the fault nor responsibility of the U.S. citizens that it's representatives entered into fraudulent contracts without their permission. Further, there is no mathematical way to pay this off, short of massively inflating and then destroying ours and others countries. We must, like Iceland, declare the debt invalid, try and finally imprison the bankers and Reps who did this to us and then cut government down to size.

Sure, the bankers will cry, they will protest, they might even mobilize tanks but this is the only way this once great Republic will survive the coming years.