Moment Of Financial Truth For U.S. Coming Soon

Moody's has ominous warning for the mounting U.S debt:

In the wake of the financial crisis and recession, Moody's Investors Service has brought new transparency to its sovereign ratings analysis — so much so that 2018 lights up as the year the U.S. could be in line for a downgrade if Congressional Budget Office projections hold.


The key data point in Moody's view is the size of federal interest payments on the public debt as a percentage of tax revenue. For the U.S., debt service of 18%-20% of federal revenue is the outer limit of AAA-territory, Moody's managing director Pierre Cailleteau confirmed in an e-mail.

Under the Obama budget, interest would top 18% of revenue in 2018 and 20% in 2020, CBO projects.

But under more adverse scenarios than the CBO considered, including higher interest rates, Moody's projects that debt service could hit 22.4% of revenue by 2013.

Yikes. Ouch. But wait! The Mayan calendar says the world will end in 2012! So there. Burn! Saved!

Then again, according to some experts of Mayan culture, the calendar signifies a major shift in human culture as opposed to its actual destruction.