All Commentary
Monday, April 25, 2011

Anxiety over U.S. Debt Preceded Outlook Downgrade


“The threat of the first downgrade of U.S. government debt — for decades considered the safest investment in the world — came as a jolt to some in Washington last week, but financial markets foreshadowed the move for months. Many global investors already essentially downgraded the U.S. by voting with their feet and increasingly shunning U.S. bonds. Among the strongest signs that the U.S. was losing its luster among the world’s investors has been the steady decline of the U.S. dollar against most other currencies as foreign investors, worried about burgeoning U.S. budget deficits, sought ways to avoid putting their cash in dollars and U.S. government obligations.” (Washington Times)

The chickens are heading home.

FEE Timely Classic
“The Evil of Government Debt” by Sheldon Richman