Blogs & Comment

US debt and credit rating

I once heard a speaker say he started to enjoy his vacation 10 minutes after it was over. He was so worried about things going wrong while away that only after vacation, and back on his home turf, could he look at it and think he had a really good time. I’ve always felt that this applied to economic recessions. Are we or are we not in recession discussions continue until after the period in question is over. Then it’s either a full description of how bad the recession was or fonder memories of how we dodged another bullet. We’re always looking at what was or what is coming but often not seeing what is happening right now.
Well here are a couple of things happening right now with the US economy that are worth considering. First, a good website with a US debt clock is http://zfacts.com/p/461.html. This is one clock worth watching. As of 4:30pm on May 2, 2008, total US government debt was $9,345 trillion. This is approaching one-fifth of the GDP of the entire planet. In one minute, this debt increased by $1.3 million. By comparison, total market capital for all companies on the Canadian Business Investor 500 this year was only $1.7 trillion.
Secondly, in the table below, the semi-annual Institutional Investor Country Credit survey shows that the U.S credit rating has slid downward in the last six months. This is a dangerous combination of rising debt ($16.7 million in the last 13 minutes) and an increased concern about the ability to pay.