Bond raters warn U.S. social programs

Community Action, March 20, 2008

Having failed to foresee the subprime mortgage fiasco, the influential bond rating services, Moody's and S & P, are demanding the United State's plan to privatize Social Security & Medicare. Otherwise, they threaten to reduce the rating of U.S. government bonds, the Wall Street Journal reports. Lower ratings mean it would cost the U.S.

government more to borrow money. They consider these programs too great a burden on the American economy. The rating organizations are following the model laid down by the U.S. controlled World Bank and International Monetary Fund; that require developing countries to drop social programs if they are to receive financial aid. The bond raters have said nothing about the Bush administration's spending on the war in Iraq or the tax cuts that have put the U.S. government deep into serious debt.