Multi trillion dollar deficits be damned, the credit rating of the USA remains AAA. There is a “warning” attached to this rating that the deficit must be addressed or the recovery must come quicker than expected, (www.nytimes.com/2010/02/07/weekinreview/07sanger) but the perception of the USA as a credit worthy investment is remarkable. The news last week that Greece, Spain and Portugal may default on some of their obligations caused more of a ripple in the world’s markets than the down turn of the American economy.
The USA has never defaulted on a loan, and the world is betting they won’t end that record in the near future. There is no longer talk about when Japan might overtake the US as the world’s biggest economy. The talk now is when China might overtake Japan for the number two spot. It is another sign that things are never as bad as they seem in low times nor never as good as they seem in high times.
By Myron Gushlak
