Can we still keep the American Automobile Association?

Because if this is true, that might be the only AAA the US has left.

From Bloomberg:

The U.S. and the U.K. have moved “substantially” closer to losing their AAA credit ratings as the cost of servicing their debt rose, according to Moody’s Investors Service.

The governments of the two economies must balance bringing down their debt burdens without damaging growth by removing fiscal stimulus too quickly, Pierre Cailleteau, managing director of sovereign risk at Moody’s in London, said in a telephone interview.

Under the ratings company’s so-called baseline scenario, the U.S. will spend more on debt service as a percentage of revenue this year than any other top-rated country except the U.K., and will be the biggest spender from 2011 to 2013, Moody’s said today in a report.

“We expect the situation to further deteriorate in terms of the key ratings metrics before they start stabilizing,” Cailleteau said. “This story is not going to stop at the end of the year. There is inertia in the deterioration of credit metrics.”

Yikes! (I say that way too much these days.) The only silver lining to this is that this news is a "warning shot" that the US (and UK) need to do a few things and not do a few others in order to maintain that coveted AAA rating.

I remember credit ratings being a very big deal even among the hoi polloi in South Korea in the aftermath of the Asian Economic Crisis (the so-called "IMF Era"). Everyone became a lay economic expert of sorts, poring over the papers becoming a quotidian task, as tens of millions of people struggled to figure out how the floor fell out from under them and how they would finally be able to get their footing back.

By contrast, here in the US, I don't see that same diligent push for self-education in the economic principles that were at work to cause the problems we're in or what to do about them. Mostly what I see is impatience, to the point that people are ready to vote back into power the party that helped engineer, oversaw, and then failed to adequately react to the meltdown.

And in such an environment, I doubt most know what will happen if the US is downgraded from AAA. I think I have an idea, but I recognize that I may be utterly clueless. Again, the news media fails to perform its duty to inform the electorate. But we know all about the latest antics of Sarah Palin, Eric Massa, and the Real Housewives of Takeyourpick.