CREDIT CRUNCH

While sadly inevitable, Moody’s finally joined other credit rating agencies and reduced US sovereign credit to one notch below triple-A. Swelling deficits, a peace-time deficit-to-GDP ratio exceeding 6%, a debt-to-GDP ratio nearing its WWII high, and with lawmakers working on a bill that will meaningfully worsen our fiscal situation, the timing is hopefully, but probably not, a wake-up call. Repeated profligacy over several decades has hollowed out our public finances.