It's been a year since when the unthinkable happened. The United States lost the hallmark of financial reliability, Triple A which are boasted by the states whose public finances are the most secure. The rating agencies did not welcome either the public deficit – not far from 10% of GDP – nor the growing debt nor, above all, the congressional animosity over the renewal of the public debt limit: a stalemate created by the inability to agree (between Republicans and Democrats), a stalemate that had brought the proud US Treasury perilously close to defaulting on debt payments interests.
The situation not much has changed since then, if it is true that the deficit continues to be high, and there is no medium-term plan for reduction in sight, other than what passes through the gauntlet of the 'fiscal cliff' early 2013: a sudden squeeze of 4% of GDP, since the end of the Bush-era tax cuts and the beginning of automatic spending cuts; squeeze that would bring the economy to its knees.
The function of the cries of alarm launched by the rating agencies is to warn savers: beware of lending money to deviant countries, or, if you really want to lend it, ask for higher interest rates. But this time the rating agencies have barked at the moon. For a year now, the US Treasury has continued to finance itself with the utmost ease, and rates have even fallen to historic lows. Of course, the euro crisis helped: as Bill Gross said, having 'the least soiled shirt among those in the laundry' is something that weighs on investors' choices.
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