A lose in rating means more of a percentage of GDP that goes to pay higher interest rates on debt. Is Austerity far behind?
March 15 (Bloomberg) -- The U.S. and the U.K. have moved “substantially” closer to losing their AAA credit ratings as the cost of servicing their debt rose, according to Moody’s Investors Service.
The governments of the two economies must balance bringing down their debt burdens without damaging growth by removing fiscal stimulus too quickly, Pierre Cailleteau, managing director of sovereign risk at Moody’s in London, said in a telephone interview.
Under the ratings company’s so-called baseline scenario, the U.S. will spend more on debt service as a percentage of revenue this year than any other top-rated country except the U.K., and will be the biggest spender from 2011 to 2013, Moody’s said today in a report.
“We expect the situation to further deteriorate in terms of the key ratings metrics before they start stabilizing,” Cailleteau said. “This story is not going to stop at the end of the year. There is inertia in the deterioration of credit metrics.”
Read more...
earlier:
From left: Michael D. Furlong, the official who was said to have hired private contractors to track militants in Afghanistan and Pakistan; Robert Young Pelton, a contractor; Duane Clarridge, a former C.I.A. official; and Eason Jordan, a former television news executive.
Defense Department investigates the use of mercs to hunt and kill suspected insurgents in Afghanistan and Pakistan
KABUL, Afghanistan — Under the cover of a benign government information-gathering program, a Defense Department official set up a network of private contractors in Afghanistan and Pakistan to help track and kill suspected militants, according to military officials and businessmen in Afghanistan and the United States.
The official, Michael D. Furlong, hired contractors from private security companies that employed former C.I.A. and Special Forces operatives. The contractors, in turn, gathered intelligence on the whereabouts of suspected militants and the location of insurgent camps, and the information was then sent to military units and intelligence officials for possible lethal action in Afghanistan and Pakistan, the officials said.
While it has been widely reported that the C.I.A. and the military are attacking operatives of Al Qaeda and others through unmanned, remote-controlled drone strikes, some American officials say they became troubled that Mr. Furlong seemed to be running an off-the-books spy operation. The officials say they are not sure who condoned and supervised his work.
It is generally considered illegal for the military to hire contractors to act as covert spies. Officials said Mr. Furlong’s secret network might have been improperly financed by diverting money from a program designed to merely gather information about the region.
Read more...
