As Democrats and Republicans continue to bicker over raising the debt ceiling, the United States’ AAA credit rating is now in danger. Moody’s Investors Service has put the US bond rating up for review. The failure of our government to raise the debt ceiling has raised the possibility that the US could default on its obligations.
President Obama has offered a plan that reduces the deficit by $4 trillion over the next 10 years. The plan includes $3 trillion in cuts and roughly $1 trillion in new tax revenues. Republicans oppose the plan because of the new tax revenues. Democrats are balking because of possible cuts to Medicare and Social Security. In today’s political climate, compromise seems impossible.