US needs to be less corrupt to get their AAA rating back.

Digital Doctor

Well-known member
I see the already downgraded US Sovereign Debt is AA+ but was further downgraded to a Outlook: negative just recently. That can't be good.
Fresh off the press today .... The Corruption Index of 2010.

Is there a relationship between corruption and debt ? Indeed there is.
As it turns out, every country with a AAA rating on their debt scored better on the Corruption Index than the United States. Well, there was one exception - France - and today the S&P mentioned they weren't all that comfy on France's AAA rating.

So the good news for American Tax Payers (whom are paying more to service the debt due to the AA+ debt status) ... all you need to do is get your country to be less corrupt. Oh wait, that's the bad news.

corruption.and.debt.rating.united.states.too.corrupt.webp
 
Actually, I was just wondering about the relationship between corruption and debt ratings.
More research into the Corruption Perception Index shows that the S&P probably takes the CPI data quite seriously.

To view this content we will need your consent to set third party cookies.
For more detailed information, see our cookies page.
Transparency International's Director of Policy and Research, Robin Hodess, discusses the significance of the CPI, how it is used and where it fits into the corruption research landscape.
"Businesses use the CPI to guage investment opportunities" [2:30]
 
Not surprised about Belgium, corruption is a national sport, politicians win gold each year (especially in the South).
 
An interesting idea would be to rate how public or private healthcare is in all the countries with a AAA rating on their debt. I suspect that all the countries with AAA rating have more a better public healthcare system than the USA.
 
Corruption is human nature. The key is to keep it tamped down to a certain level.

Trying to do away with it completely is probably subject to the law of diminishing returns.

I once heard a Google.org (their non-profit wing) speaker say that their goal was to change governments in poor countries from being 10% efficient...to being 20% efficient. They said such a change would be amazing and revolutionary.

Perfect is most always the enemy of the good.
 
We have very similar levels of corruption(according to the CPI) to countries that are still maintaining a AAA credit rating: http://cpi.transparency.org/cpi2011/results/. Look at the debt in terms of %: https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html If you want another source for debt as a % of GDP then I suggest you try: http://usdebtclock.org/world-debt-clock.html they have slightly higher(ok, maybe significantly) percentages but they still reflect the same trend; many countries that have a higher % of debt in terms of GDP still have their AAA rating, it would appear that S&P is the truly corrupt entity.
 
The U.S. has already fallen, but they're too much in denial to realize it, and therefore will never do anything about it. Oh there might be an upswing or two in the future, but the country is facing its last days. Sad for truly innocent.
 
The U.S. has already fallen, but they're too much in denial to realize it, and therefore will never do anything about it. Oh there might be an upswing or two in the future, but the country is facing its last days. Sad for truly innocent.
That is pretty huge exaggeration. I would say the US is in a decline, but definitely not going to fade away. The government is going to have the majority of its programs shut down, yes, but we still have the world's largest economy. I don't foresee a future in which the US does not exist, that would destroy the global economy and make virtually every other nation non-existent.
 
I don't understand these S&P ratings... Everything seems to be A to AAA rated... WTF does an F look like?

http://www.understandingratings.com/

Standard & Poor’s credit rating symbols provide a simple, efficient way to communicate creditworthiness and credit quality. Its global rating scale provides a benchmark for evaluating the relative credit risk of issuers and issues worldwide. The ratings serve as a type of shorthand for communicating opinions about credit quality to investors and other market participants.

Standard & Poor’s uses ‘AAA’, ‘BB’, or ‘CC’ to communicate relative credit risk, with ‘AAA’ denoting the strongest creditworthiness and ‘C’ or ‘D’ denoting the weakest, or that a default has occurred. The rating symbols provide a simple way to communicate opinions about creditworthiness.

The better the score on the corruption index, the less corrupt the Government / fiscal arena of said Government.

The credit ratings are S&P's "opinion" only on the viability of the country to repay debt based on the countries assets vs. debt ration.

Basically, the US is spending more than it earns as a Government & country, thus the chances of it paying foreign lent debt back on a timely basis is what creates these credit ratings. They are indicators for foreign investment risk assessment.

The following link is a more accurate index for the country corruption index: http://cpi.transparency.org/cpi2011/results/

The US have dropped two more positions between 2010 to 2011, to 24th and New Zealand sits #1
 
Not once did I hear anyone ask either Presidential candidate about how they plan on making America less corrupt.
Ouch.
It should have been debate question #1.
 
S&P rated Bernie Madoff AAA. These are meaningless ratings from corrupt companies that make their money by providing cover for Ponzi schemes.
The loopholes that allowed Madoff to operate are embarrassing. However, we are talking about something quite different ... we are talking about entire countries ... and their ability to pay back their loans.
Anyone who cares about the S&P ratings is foolish.
American tax payers should care.
America is paying more interest money because S&P downgraded American debt.
It would be foolish not to care.
Like it or not, Moody's and S&P will be deciding who gets cheap loans and who doesn't. Pretending they won't is foolish.
 
The loopholes that allowed Madoff to operate are embarrassing. However, we are talking about something quite different ... we are talking about entire countries ... and their ability to pay back their loans..

If S&P can't get relatively small companies right, why would anyone think their flawed product based on corrupt business practice of being paid for ratings had any meaning for much larger, more complex economic and financial entities like countries? The Great Recession demonstrated that S&P's rating system has no meaning. It is something large corporations purchase to entice people to buy their stocks and bonds.
 
Top Bottom