Friday, January 11, 2008
In the midst of much populism on one end and paranoia on the other end of the presidential campaign, few people paid attention to a cataclysmic headline: Moody's argues that rising debt obligations could lead to the United States having its credit rating cut from AAA. Now, while some of this is saber-rattling, the fact that a rating agency would even dare to talk about it is pretty phenomenal, and reflects the huge entitlement obligations (Social Security, Medicare, etc) that is promised by the US Federal govt. I have previously reported on some amazing slides from the Comptroller General showing just how large this obligation is. Debt is $411,000 per household, with entitlement spending expected to outpace GDP growth several times over. This clearly isn't sustainable! And yet, few presidential candidates are talking about it in more than generalities. Contrast the $46 trillion debt burden with spending by most agencies, and you realize the big threat isn't spending too much money on the Environmental Protection Agency, it's running with a social contract that isn't viable any more!