patrick.net

I'm sorry, ECBB. Your debt limit is $.01. :)

Well I don't believe it'll happen any more than we would lay 25% tariffs on imported goods.

Of course even assuming we dropped a grade, I suspect it'd be a big SO WHAT?

After all pretty much everyone's economy sucks right now. As the hiker said, you don't have to be faster than the bear you just have to be faster than your buddy.

Not going to happen.

If it did, that would be a sign of a government captured by lunatics. Hell yes they would lower the credit rating.

Not only will our ratings be lowered, the world is getting tired of our inability to become fiscally sound and of our monetizing our debts by printing more and more fiat money. When the ratings are eventually lowered, the cost to borrow funds to keep this charade going will increase dramatically, adding even more debt to the already bloated debt. We are in for a continual drop in our standard of living. Get used to it and try to make whatever moves are necessary in order to prepare for your new dismal economic future.

http://online.wsj.com/article/SB10001424052748704004004576270693061767996.html?mod=WSJ_hp_LEFTTopStories

So much for my narrow minded view that Moody's, Standard & Poor's, et. al. would conveniently ignore the mess we ha e made. If / when our rating is downgraded, then what?

If almost a decades worth of savings (for a house) is rendered useless, perhaps it is better to buy sooner rather than later?

I'm really not sure what a downgrade would mean to a Joe 6 pack such as myself.

As I said. We are GRADING ON A CURVE. Ratings are like letter grades.

If the highest grade is A+++ and you got one great.

If the highest grade is B- and you got one, still great.

You really think Europe is in any better shape? Nope.

EastCoastBubbleBoy says

If / when our rating is downgraded, then what?

Not much. Lots of countries don't have AAA ratings. Just means rates might go up a tad. Japan had is rating lowered when it was running huge deficits, and it just didn't matter.

Any default would entirely be by choice. The US has no problem financing it's debt, and could likely run up another $10T without much consequence.

I've had this "Bondzilla" (chart with Godzilla 'shopped onto it) trotted past so many times now it's difficult to take it seriously any more. It's a fave in Denninger's treehouse:

http://www.blogtalkradio.com/marketticker/2010/12/13/heh-look-its-bondzilla