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The US is at risk of losing its top-notch triple-A credit rating within a decade unless it takes radical action to curb soaring healthcare and social security spending, Moody’s, the credit rating agency, said on Thursday.

The warning over the future of the triple-A rating – granted to US government debt since it was first assessed in 1917 – reflects growing concerns over the country’s ability to retain its financial and economic supremacy.

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radical action to curb soaring healthcare and social security spending

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Moody's doesn't want to be faced with the enormous pressure on it when the US gets REAL close to the tipping point of those T-Bill AAA ratings being suspect by anyone's standards.

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Originally posted by Noise:

Radical action to cut healthcare and social security, current military expenditures are fine though

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Exactly. Screw them.

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The US is at risk of losing its top-notch triple-A credit rating within a decade unless it takes radical action to curb soaring healthcare and social security spending, Moody’s, the credit rating agency, said on Thursday

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posted by Michelle
On the other hand, though, they could lower health care spending by nationalizing health care and making it universal. A single-payer system is so much cheaper. Just ask Canada.

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I doubt they're talking about "private" healthcare, whether paid for by insurance or out of individual's pockets. I read this as a direct shot at Medicare and Social Security. Both are heading for disaster - the main difference is that the Medicare problem is literally ten times the size of the Social Security problem and Medicare is going to hit the wall within the next few years (Social Security is farther out).

While Medicare is by far the larger of the two and will blow up a lot sooner, neither will go away.

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Originally posted by abnormal:

if the US can't make Medicare work, how will making the program ten times larger solve the problem?

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I heard David Frum (yes, him!) say today on cbc radio1 that the US government spends more per capita on health care than does the Canadian government. So making their system more like ours might indeed help.

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Originally posted by abnormal:
Fidel, you're missing the whole point (on purpose I expect). The items you've focused on don't qualify as footnotes in Moody's analysis. They're focusing on Medicare and Social Security - both are train wrecks in the making.

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And where else would the analysis be? Is this the same credit rating agency that said World CON and ENRONg were stable companies at start of the 2000's?

I agree with Stephen, they can't afford tax cuts for rich friends of the party. The Yanks want a labour-induced recovery and increase exports to get things turned around.

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Originally posted by RosaL:

I heard David Frum (yes, him!) say today on cbc radio1 that the US government spends more per capita on health care than does the Canadian government. So making their system more like ours might indeed help.

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That's right - government in the US (all levels) in the US already spends more per capita on health care than government in Canada. And even with the huge additional spending by the private sector in the US, they are not as healthy as us.

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Originally posted by No Yards:
They could afford public health care if they dumped most of the private health care insurance, taxed enough to cover the public insurance plus a bit to reduce the current health care spending deficit, which would still end up being a "bottom line saving" to the average tax payers' tax home salary.

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Exactly. If people had higher taxes to pay for their health care, but no insurance premiums to pay, then I think the majority of Americans would be better off.

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I heard David Frum (yes, him!) say today on cbc radio1 that the US government spends more per capita on health care than does the Canadian government. So making their system more like ours might indeed help.

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Why do you think corporations whine about "competitive advantage" of places like Canada where we pay for universal health care and companies don't have to go to the expense of providing full health coverage for their employees?

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Because the cost of healthcare is borne by the public and not the corporation and as a result their customers?

But Moody's is a private entity and will assign whatever credit rating they feel is appropriate. Of course if the US "solves" the problem Moody's will evaluate the economics of whatever solution is adopted and amend their rating accordingly.

[ 13 January 2008: Message edited by: abnormal ]

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Originally posted by abnormal:

Because the cost of healthcare is borne by the public and not the corporation and as a result their customers?

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Originally posted by Boarsbreath:
Spend more than Canada? They spend more than anybody, even the French.

I suspect the focus is on Social Secority and the medical programs because those cannot, realistically, be turned off. And they are set to balloon as the population ages, the same population who vote most. Army bases can be shut down -- of course military spending is fantastically wasteful, but it's easier to deal with than entitlement programs.

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Originally posted by RosaL:

Bush and various others are just dying to privatize both Social Security and Medicare. They've been talking about it for some time.

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Medicare has 2 parts- Part A is fully funded hospital care and Part B is optional doctors care for medically necessarytreatment. Part B is funded by premiums paid for by seniors and disabled @ $97.00/month

Medicaid is a joint program by federal and state governments to provide medical care for low income individuals and families. Coverage varies from state to state.

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the $463 billion Pentagon is so unaccountable that not only could the Dept. of Defense not pass an audit, its books are in such bad shape that an audit cannot be performed. See Financial Mismanagement in the Department of Defense Report(pdf)

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As part of the concerted effort to contain the damage,all these US financial entities are announcing deals for capital injections from Chinese and Arab sovereign wealth funds.

The spin is that the banks are seeking financing from selected sources and that these sources are performing due diligence and making investment decisions based on in-depth analysis that indicates a profitable investment.

The truth is that these sovereign wealth funds are loaded with American dollars that have no place to go and the funds are merely dumping dollars,hoping for the best.