So I’m sure we’re all aware of the ongoing struggle regarding the debt ceiling here in the United States; the print and television media have been covering it extensively.
Why exactly is there concern if the debt ceiling isn’t raised? One possible outcome would be interest rates on credit cards increasing if the US defaults because the ratings agencies, which signal investors, would downgrade the US’s AAA rating.
But I have to pause and ask something: Why should we trust the ratings’ agencies? If I recall, it was debt agencies, such as S&P and Moody’s, that gave financial products a AAA rating even though they were nothing more than junk, contributing to one of the worst financial crises in history.
So why do we use these so-call ratings agencies? Well, maybe it’s because they have Wall Street’s backing to continue giving false ratings to junk, in order to move WS’s products more easily.