It’s not just global sovereign debt. Cities like Dallas and Chicago are increasingly at odds with ratings agencies skeptical of their ability to repay investors.
S&P indicated that global sovereign debt downgrades are likely to outpace upgrades in 2017.
S&P downgraded the City of Dallas over skepticism it will be able to fund the promises its pension fund made to former city employees without going deeper into debt.
Meanwhile, the City of Chicago is locked in a dispute with Moody’s over its recently issued “junk” bond rating. Going forward, the city will seek a better rating by retaining S&P and Fitch instead.
In the minds of government officials, the debate is no longer about debt-to-GDP ratios, debt service as a percentage of tax collections, or other metrics that indicate an outlook that views ever-increasing debt as a drag on economic growth. Their rhetoric is laser-focused on removing obstacles to borrowing ever more money.
How can this end well without a major adjustment?
Tip Freedomwat.ch Staff with Bitcoin