The Moody "Blues"

No, this is not a blog about one of my favorite 60's rock bands.

The national debt and uncontrolled spending in Washington is one of the least understood and at the same time the most serious issue affecting every American today. But why should you worry about the country's debt as long as you get:
your social security payment;
or your Medicare subsidy;
or your welfare payment;
or your food stamps;
or your free government housing;
or your children get their free school lunches;
or you get your free "stimulus" check from the government;
or you get subsidized for your college education;
or cash back from the government if you buy a car;
or cash from the government to buy a home;
or two years of unemployment benefits;
or cash from the government to help pay the mortgage you cannot support;
and soon a government subsidy to help you buy health insurance ?

How can anyone criticize such a compassionate and "giving" government? As one Detroit recipient responded when asked where she got her free stimulus check; "Obama give it to me, from his stash". Unfortunately, I have news for Obama and his Administration - "THE GOVERNMENT 'STASH' IS GONE".

As a result we are about to get the "Moody Blues". Most Americans have never heard of Moody's Investors Service. Moody's are the world-wide recognized authority in bond ratings. In layman's terms when a country, or a state, or a company sells bonds to finance their debt, Moody's rates the risk of those bonds being paid back. Throughout history the USA has had a gold-plated credit rating of AAA for their Treasury Bonds. But in a recent report Moody's made some interesting comments:

Regarding our AAA bond rating they said: "The rating is 'stable', but the 'distance-to-downgrade' has substantially diminished". In layman's terms, for the first time ever the USA is getting closer to having their Treasury Bonds downgraded. Why is this a problem? Because if Moody's reduces our bond rating we will pay higher interest rates to finance our staggering debt. And this higher interest rate will affect all aspects of our economy and could drive us into another recession, or worse.

In analyzing our massive debt burden, Moody's also made another interesting statement: "Growth alone will not resolve the USA's increasingly complicated debt equation. Maintaining a AAA bond rating will invariably require fiscal adjustments of a magnitude that in some cases will test social cohesion". In layman's terms Moody's are predicting that we will not be able to "grow" our way out of this massive debt problem - meaning spending cuts and higher taxes could be so severe that it could result in "public unrest".

Could we be seeing riots like they are having in Greece...citizens upset because they cannot get their welfare, or food stamps, or pension payments? Or upset because Obama has had to break his promise of, "no new taxes on the middle class"?

My parents always told me: "There is no such thing as a free lunch"...and if Moody's are accurate in their predictions, Obama's free lunches will soon start to disappear and if he truly is the Messiah he will have to start "feeding" the multitudes from an empty pot.