Sequestration, lower government spending, higher taxes…all things we discuss frequently, mostly from the fear factor of a slower economy, however there is a very bright spot.
Moody’s Upgrades the US
Recently, Moody’s increased it’s rating of the United States to stable from negative. While the headlines glowed and the commentators squawked when the downgrade occurred two years ago, hardly a peep was mentioned on the more positive outlook.
S&P also increased their opinion, however they have YET to raise their official rating that was decreased in 2011.
Surplus is the reason
According to the Congressional Budget Office, the deficit is falling and there was recently even a surplus (annual month over month comparison), due to the afore-mentioned items that we worry about at times as they are again a headwind to the economy.
Why So Positive?
A good credit rating is positive for interest rates long-term (keeps them lower), helps keep confidence from our overseas trading partners, and also shows we are heading in the correct direction. Longer term, Moody’s did note, pressure from baby boomers will increase costs in the future. Just another step for steppers!
Have a Great Monday!
John Kvale
http://www.street-cents.com http://www.jkfinancialinc.com 8222 Douglas Ave # 590 Dallas, TX 75225