Moody's, (NYSE:MCO) S&P Say U.S. in Danger of Losing Credit Standing

The idea that the U.S. credit rating could be slashed was unthinkable not that many years ago, but out-of-control government spending and misguided actions by the Federal Reserve now have them on the brink of having its credit rating cut, saying rating agencies Moody's (NYSE:MCO) and S&P.

In order to retain support for its Aaa rating, Moody's said the U.S. would have to deal with the change direction on the debt ratio trend it is now on.

Sarah Carlson, senior analyst at Moody's, said, "We have become increasingly clear about the fact that if there are not offsetting measures to reverse the deterioration in negative fundamentals in the U.S., the likelihood of a negative outlook over the next two years will increase."

Carol Sirou, head of S&P France, added, "The view of markets is that the U.S. will continue to benefit from the exorbitant privilege linked to the U.S. dollar. But that may change. We can't rule out changing the outlook."

Contrary to the mainstream financial media, Standard & Poor's pointed to the deteriorating economic situation in the U.S. (not a recovery) as having a role in their decision to change the rating of America.