Cato commented on this story today:
“The US is at risk of losing its top-notch triple-A credit rating within a decade unless it takes radical action to curb soaring healthcare and social security spending, Moody?s, the credit rating agency, said on Thursday,” The Financial Times reports. “The warning over the future of the triple-A rating — granted to US government debt since it was first assessed in 1917 — reflects growing concerns over the country’s ability to retain its financial and economic supremacy.”
Jagadeesh Gokhale says the warning comes late and might leave Congress feeling complacent about Medicare and Social Security. Medicaid, too.
This warning has two implications for North Carolina. First, for state Medicaid spending. Second, for the state bond rating regardless of Medicaid: sovereign ratings cap corporate bond ratings and could cap subnational government bond ratings, too.
