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Washington Post asks if US 'deserves' solid credit rating

WASHINGTON, DC - OCTOBER 02: U.S. Speaker of the House Rep. John Boehner (R-OH) speaks to the media after a meeting at the White House with U.S. President Barack Obama, Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell, and House Minority Leader Nancy Pelosi about the government shutdown on October 2, 2013 in Washington, D.C. The federal government has been shut down since October 1st, after the House and Senate could not agree on a resolution to keep the government open. Credit: Getty Images

With the possibility that the United States will default on its debt at the end October, the Washington Post somberly editorializes:

By now it’s a cliche to refer to U.S. debt as a “highly liquid” or “risk-free” asset. But these are not technical attributes of gilt-edged paper printed in the U.S.A., much less magical qualities. Nor do investors pay a premium for this debt out of deference to our military might, eagerness to trade in our market or even faith in our rule of law. ...

Much has been said about the embarrassing fact that the United States owes the central bank of China more than $1 trillion. When you really think it through, though, China’s acceptance of our full faith and credit is an enormous compliment. It is a financial endorsement that implicitly contradicts Beijing’s claims that its Communist market system is superior to ours. As of now, it’s still a compliment we deserve. But for how much longer?

@eScarry

One last thing…
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