S&P: U.S. Debt Will Reach 'Junk Bond' Rating By 2030 Without Entitlement Reform

S&P: U.S. Debt Could Reach ‘Junk’ Rating by 2030, Absent Entitlement Reform
Thursday, July 14, 2011
By Edwin Mora, CNS News

The credit agency said its sobering outlook was not a prediction about steps it would take in the future, but rather a warning about what might happen should the government not tackle its fiscal problems. (Image: S&P)

(CNSNews.com) – U.S. federal debt could potentially be downgraded to junk status by 2030 if the government does not significantly reform entitlement spending, according to a study by Standard & Poor’s, one of the three Wall Street credit ratings agencies.

The S&P study, which shows the effects of rising entitlement-driven federal debt on the federal budget and debt rating, indicates that if entitlement costs are not brought under control soon, America will see its coveted AAA debt rating evaporate.

S&P said that the weight of retiring Baby Boomers would drive government debt to unsustainable levels, forcing the ratings agency to severely downgrade its U.S. debt rating.