From MSNBC –

Moody’s warned Monday that it could move a step closer to cutting the U.S. AAA rating if President Obama’s tax and unemployment benefit package becomes law.

The plan agreed to by President Obama and Republican leaders last week could push up debt levels, increasing the likelihood of a negative outlook on the United States rating in the coming two years, the ratings agency said.

A negative outlook, if adopted, would make a rating cut more likely over the following 12-to-18 months.

For the United States, a loss of the top Aaa rating, reduce the appeal of U.S. Treasuries, which currently rank as among the world’s safest investments.

We just spent several months with every commentator screaming out that we can’t afford to spend more money, that social security had to be cut, that things could not go on the way they had been and then –

President Obama made a deal with the Republicans to add trillions to the debt! (and social security will still get cut!)

The bizzarro world of Washington marches on. But there will be pain, there will be payback.

James Pilant