In my last post I discussed the nation’s financial condition, and contrasted national bankruptcy with personal bankruptcy. In this post I will contrast the nation’s credit rating with personal credit rating.
I. The Nation’s Credit Rating
Some time ago I wrote “Bankruptcy And Your Retirement Accounts”, in which I talked about the growing problems with retirement funds that had invested in various types of government debt. I observed that since many states and municipalities had large unfunded obligations on such things as employee pension and medical plans, the quality of some state and municipal bonds as investment vehicles could be headed toward junk bond status. In passing I referred to the recent downgrading of federal debt.
Well, it looks like a further downgrading of federal debt is in the offing – perhaps even before Christmas.