A scenario former United States Treasury Secretary Henry Paulson described as “unthinkable” during a recent discussion in Aspen is apparently imaginable in the minds of Moody’s Investors Service.
Moody’s is the first of the big-three rating agencies to place the United States’ triple-A rating on review for a possible downgrade. The agency said there is a small but rising risk the federal government could default on its debt.
Speaking earlier this month at the Aspen Ideas Festival, sponsored jointly by The Aspen Institute and The Atlantic magazine, Paulson doubted the government couldn’t meet its obligations to its creditors.
“It’s unthinkable to me that the United States of America is ever going to default,” he said.
Moody’s is taking a different view, which sent dollar and U.S. stock futures tumbling late Wednesday. The rating agency put the nation’s leaders on notice last month that the debt ceiling needed raising. Democrats and Republicans, however, are locking horns over the politics surrounding such a move.
To watch additional videos from the Aspen Ideas Festival, all related to the debt and budget, or to read the rest of this story, originally published at RealAspen.com, click here.