By Bill Wilson
On January 26th, the Congressional Budget Office (CBO) announced that the budget deficit would top $1.5 trillion in 2011, the highest ever on record. That is mostly because of the unpaid-for $56 billion extension of unemployment benefits and a $120 billion cut in payroll taxes on employees from December’s tax deal.
Because there were no offsetting spending cuts for these items, the deal as enacted will now dig the nation deeper into an already unsustainable pit of debt. For comparison, the deficit in 2010 was $1.3 trillion.
At the time of the deal, Moody’s had warned the U.S. that it would increase the likelihood of a negative outlook on the nation’s Triple-A credit rating. Now, the sovereign credit rating agency is keeping to its word.
In a January 27th report, Moody’s wrote, “Although no rating action is contemplated at this time, the time frame for possible future actions appears to be shortening, and the probability of assigning a negative outlook in the coming two years is rising.” A negative rating would in turn increase the likelihood that the Triple-A rating would be downgraded.
Read more at NetRightDaily.com
-- Political Pistachio Conservative News and Commentary
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