A ballooning deficits and a surge in spending have put the U.S. at risk of losing its triple-A credit rating. But while the latest economic forecasts are raising some alarms in terms America’s ability to control its finances — which seem to be eroding — the U.S. government’s triple-A credit rating still “remains solid,” according to Pierre Cailleteau, managing director of sovereign risk at Moody’s Investors Service.
From Bloomberg: “Although the U.S. is losing altitude in the Aaa range, it is starting from a very strong base,” Cailleteau, who is chief international economist at Moody’s, said in Tokyo today. The economy is resilient enough to recover and the government is committed to raising taxes and cutting spending, he said.
The Congressional Budget Office projects the federal budget shortfall will reach a record $1.85 trillion this year…
New York-based Moody’s last month affirmed the top credit rating for the U.S., saying it’s supported by “a diverse and resilient economy, strong government institutions, high per- capita income, and a central position in the global economy.”
Moody’s however, has said U.S. could lose its top credit rating within a decade unless it takes agressive action to control soaring health care and social security spending that threaten to engulf the federal government in debt. Cailleteau also pointed out that the greenback’s status as the world’s reserve currency won’t change soon.