David Wessel, Brookings Institution:
Well, listen, the — what Moody’s did was shine a flash light on something that any sophisticated investor and even some unsophisticated investors knew, that the U.S. is on an unsustainable budget trajectory.
After all, Moody’s is one of three rating agencies, and the other two have previously, one as long as 2011, stripped the U.S. of the AAA rating. I think what’s happening is that, after sort of being ignored for a while, the markets, some of the press, the pundits and a few members of Congress are beginning to say, wow, we have a pretty big budget deficit. We have a large and growing federal debt and Congress is on the verge of making it even worse.
And I think that’s what the markets are focusing on.
