Too big too succeed

For at least a century, the credit rating of the American government was rock solid. Anyone, anywhere, could invest in U. S. Treasury securities knowing that they had made one of the safest investments in the world.

But this week came word from Moody’s, the well-known rating agency, that within four years America’s bonds might lose their longstanding AAA status if Washington’s spending and budget deficits continue to soar.

 The very thought that America’s credit status could be downgraded should send shivers through the halls of Congress as well as the world financial community. Should it actually occur, it would be more than costly (raising borrowing costs to the U. S. government), but it would also signal a dangerous slide toward fiscal insolvency or higher inflation, or both.

 This bad news should not come as a surprise, given the unconscionable spending spree of recent months and years. Since Barack Obama took office in January 2009, the Congress has spent a full billion dollars every single hour! Its share of the country’s GDP is on a path to beat even the numbers during World War II.

 The figures are mind-numbing, to be sure — so much so that most members of Congress don’t even bother to read the appropriations bills they pass. Let me numb your mind a little more before trying to make some sense of it all:

 Before President Obama’s term is half over, federal spending will have doubled in just a decade. And it’s not a surplus of revenues that they’re spending. Indeed, the deficit in a single year’s budget is now as large as the entire budget in George W. Bush’s first year as president, 2001. The flood of red ink is adding to the national debt to the tune of at least $4 billion every day. At more than $12 trillion, that debt amounts to about $37,000 for every living American.

 Certain private firms are widely believed to be “too big to fail.” So for the past 18 months Congress has been bailing out dozens of them and how to run their businesses too. Companies that lose billions are being told what to do by an outfit that loses trillions.

 The question the world financial community should be asking of America is this: Are you now trusting your economy and your livelihoods to a government that is too big to succeed?