Gulp: U.S. to lose AAA debt rating?

I guess my question would be, if we haven’t lost it already, how fantastically huge would our annual deficits have to be before we do lose it? $3 trillion? $4 trillion?

Something for Obama to shoot for now that national health care’s on the way.

“It’s very important that this Congress and this president put in place policies that will bring those deficits down to a sustainable level over the medium term,” Geithner said in an interview with Bloomberg Television yesterday. He added that the target is reducing the gap to about 3 percent of gross domestic product, from a projected 12.9 percent this year.

The dollar extended declines today after Treasuries and American stocks slumped on concern the U.S. government’s debt rating may at some point be lowered. Bill Gross, the co-chief investment officer of Pacific Investment Management Co., said the U.S. “eventually” will lose its AAA grade…

It’s “critically important” to bring down the American deficit, Geithner said.

It’s “critically important,” and by The One’s own admission our debt is “unsustainable,” and yet his two attempts at reducing spending thus far produced an initial budget cut of .0029% followed by a further cut of roughly one-half of one percent, later cannibalized by an upward revision in spending. Believe it or not, S&P was sounding alarms about America’s debt rating eight months ago, after the financial crisis first hit and Bush dumped $85 billion in AIG’s lap. Trillions of dollars in bailouts and stimulus later, with enormous new entitlements on the way, the problem’s considerably worse — and yet The One’s defenders insist there’s technically zero risk of a lower rating because the U.S. could simply print more money to pay off its debt and avert any looming default. Which, as far as I understand, means we’re facing the following choice eventually: Either increase the monetary supply to meet our obligations and risk massive inflation, or refuse to meet our obligations and suffer a lower debt rating, thereby triggering even more massive deficits. What am I missing here?

Fortunately, The One has a super secret plan by which nationalizing health care will actually bring down spending, so let’s look forward to that.