The purity police at Moody’s are getting their sanctimony on:
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.
I can’t find the article, but I read recently that “sources say” the Obama admin will focus on deficit reduction next year. If that’s the case I have no idea why he would expect to be taken seriously on the issue from anyone on either side. Pay freeze! No wait, high-end tax cuts, a neutered estate tax and a payroll tax holiday paid for with debt! No wait, deficit reduction for serious this time!
How ’bout a jobs program? 10% unemployment for several years in? Anyone? …Bueller? I mean christ, if a tax giveaway is the magical answer could we at least do it in the form of tax credits that’re awarded when hiring actually happens? Corporate America is sitting on something in the range of $1.5 – $2 trillion dollars, but gee if they just get to keep the same tax rates that already aren’t creating jobs then magic pony unicorn happytime funland everything works out in the end! Floss after brushing kids!