On January 10 Moody’s, in concert with the other main bond rating firm, Standard and Poor’s, gave the United States its top AAA credit rating. The terrorist blackmail threat came in the form of a demand by Moody’s that the U.S. government “reform” Social Security and Medicare: “In the very long term, the rating could come under pressure if reform of Medicare and Social Security is not carried out as these two programs are the largest threats to the long-term financial health of the United States and to the government’s Aaa rating.”
Steven Hess, Moody’s top analyst for the US economy spelled it out even more explicitly to the London Financial Times: “If no policy changes are made, in 10 years from now we would have to look very seriously at whether the US is still a triple-A creditThe US rating is the anchor of the world’s financial system. If you have a downgrade, you have a problem.”
There seems to be more than a difference of opinion a la David Walker as well. My question is why? How do they interpret the problem as financial?