Storm Warnings: Moody's Puts US Credit Rating on Review

All those stories you've heard from conservatives about a US default on its debt not mattering very much? Dream on.

Moody's, one of three credit rating agencies has officially placed its US credit rating on 'review.' This means that if the US defaults, the rating will be lowered. The practical impact of that is that the country will have to pay more for its bonds and notes, securities that it issues frequently. This means there will be less money to pay for health care, the salaries of troops in Afghanistan, etc; you know, little stuff like that. Just sayin.'JL

Bloomberg News reports via The Daily Beast:

Memo to Congress: Those rumblings about default aren’t just “scare tactics.” Moody’s, one of the two leading ratings agencies, says it’s putting the United States on a review for a possible downgrade of its perfect Aaa bond rating, saying it’s concerned that the debt ceiling might not be raised. “There is a small but rising risk of a short-lived default,” the agency says. A lowered credit rating would force the government to pay higher interest rates on its debt. Some politicians have argued that the U.S. could avoid default by prioritizing payments to bondholders, but the Moody’s move suggests otherwise.