FOX Business Wonders Whether U.S. Deserves Its AAA

March 30, 2011 by · 1 Comment
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FOX Business has joined many European business analysts in wondering whether the U.S. deserves the AAA rating it has maintained since 1917. In light of how other advanced nations’ sovereign debt is being aggressively scrutinized and downgraded, there are those who feel the U.S.’s AAA rating is unwarranted.

FOX believes that the interest cost of the U.S. debt as a percentage of total federal tax revenues is the greatest concern for credit rating agencies. The U.S. needs to keep the interest cost to federal tax revenue ratio stable. This is why there is pressure to raise federal taxes to avoid a credit rating downgrade.

Moody’s says that the United States debt is currently affordable. After peaking at 10% two years ago, the ratio of interest payments to federal revenue has dropped to 8.7% in 2010.

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