This will not surprise some of our regulars here, but I see that Standard & Poor’s, the rating agency has cut the debt rating and outlook for the US. (What kept you? Ed).
I’ll be intrigued as to how cheerleaders for current administration policy, such as Paul Krugman try and spin this. “Those evil bond market vigilantes…”
Time to start dusting off the “D” word.
Update: Talking of defaults closer to home, in Europe, Tim Worstall has been writing that it would be better for countries to openly discuss, and then manage, the chances of default rather than bury their heads in the sand. Meanwhile, Bloomberg columnist Matthew Lynn argues that the demise of the euro can and could be handled much more smoothly than many people believe. I hope he is right.
Another update: Dan Mitchell – of the Cato Institute, talks about lessons from Argentina. Oh great.