Just the Facts: S&P's $2 Trillion Mistake
S&P's mistake is certainly incredibly embarrassing but apart from that I'm asking myself a much more fundamental question:Why is the ability to pay considered at all when it comes to the US? A country that is indebted in its own currency can theoretically never default on its nominal obligations. Not due to inability to pay at least. I don't think that credit rating agencies even try to pass judgement on the likelyhood of governments inflating their debt away, so based on ability to pay the US credit rating should be fixed at AAA.On the other hand, S&P clearly says that what they judge is the ability AND the willingness to pay. Considering the number of congressmen and women who recently voted in favor of default, the willingness to pay has to be in great doubt. In that light, I think, the US does not deserve a AAA or even a AA. B seems more appropriate.