Former Treasury Official: Downgrade of Russian Debt a Political Act

Paul Craig Roberts, a former Assistant Secretary of the US Treasury and former associate editor of the Wall Street Journal, writes:

Standard and Poor’s downgrade is, without any doubt, a political act. It proves what we already know, and that is that the American rating firms are corrupt political operations. Remember the Investment Grade rating the American rating agencies gave to obvious subprime junk? These rating agencies are paid by Wall Street, and like Wall Street they serve the US government.

A look at the facts serves to establish the political nature of the ruling. Don’t expect the corrupt US financial press to look at the facts. But right now, we will look at the facts.

Indeed, we will put the facts in context with the US debt situation.

According to the debt clocks available online, the Russian national debt as a percentage of Russian GDP is 11 percent. The American national debt as a percentage of US GDP is 105 percent, about ten times higher. My coauthors, Dave Kranzler, John Williams, and I have shown that when measured correctly, the US debt as a percent of GDP is much higher than the official figure.

The Russian national debt per capita is $1,645. The US national debt per capita is$56,952.

The size of Russia’s national debt is $235 billion, less than one quarter of a trillion. The size of the US national debt is $18 trillion, 76.6 times larger than the Russian debt.

Putting this in perspective: according to the debt clocks, US GDP is $17.3 trillion and Russian GDP is $2.1 trillion. So, US GDP is 8 times greater than Russian GDP, but US national debt is 76.6 times greater than Russia’s debt.

Clearly, it is the US credit rating that should have been downgraded to junk status. But this cannot happen. Any US credit rating agency that told the truth would be closed and prosecuted. It wouldn’t matter what the absurd charges are. The rating agencies would be guilty of being anti-american, terrorist organizations like RT, etc. and so on, and they know it. Never expect any truth from any Wall Street denizen. They lie for a living.

According to this site: http://people.howstuffworks.com/5-united-states-debt-holders.htm#page=4 the US owes Russia as of January 2013 $162.9 billion. As the Russian national debt is $235 billion, 69 percent of the Russian national debt is covered by US debt obligations to Russia.

If this is a Russian Crisis, I am Alexander the Great.