Via Bloomberg: U.S. Default Would Change Fundamentals of Rating, Moody’s Says
The U.S. would risk not winning back its top Aaa credit rating soon if a failure by Congress to raise the nation’s debt limit causes even a short-term default, according to Moody’s Investors Service’s senior credit officer.
“Up until now, our assumption was that the risk is virtually zero of them ever missing an interest payment,” Moody’s Steven Hess said during an interview. “If they actually miss a debt payment, then it’s a fundamental change.”
So, yes, by all means, let’s play chicken with the national economy.
And, yes, we need to address the long-term fiscal situation as well:
Moody’s may still assign a negative outlook within a few months if the government fails to agree on a plan that would begin reducing its debt ratio to gross domestic product in three to four years, Hess said.
