Monday, August 8, 2011
The AAA Rating Downgrade
Being a health care executive, I have an understanding of credit and bond ratings; at least I thought that I did. I couldn't believe that it took until Friday for at least one of the rating agencies to downgrade the US AAA rating. With our country close to its second recession, the overall debt burden that now exists, the $140 billion in monthly interest payments on that debt, the rising prices of basic goods, the anemic economic growth experienced over the last two years, the rapidly declining yield on investments, record debt levels in US households, the deficit of 10.6% of the gross domestic product and an unemployment rate of 9.1%, it makes one wonder what took so long for a downgrade. The rating agencies don't give hospitals any leeway. If we had comparable indicators in the negative, rest assured we would have been downgraded in a nanosecond.