Posted by WARREN MOSLER on March 25th, 2011
If I were running any of the ratings agencies I’d immediately downgrade the US Government’s financial obligations to no more than A based entirely on ‘willingness to pay.’
There are two considerations used by all ratings agencies when determining the credit worthiness of a government. They are ‘ability to pay’ and ‘willingness to pay.’
And while the ability of the US to make timely payment of $US is never in question, willingness to pay is not only in doubt, but, in fact, not paying as obligated by law is continuously and openly being discussed as a viable option by the same legislators tasked with making the final decisions.