Moody's gets in on the act

Moody’s getting in on the act with S&P as the ratings agencies worry about SA government debt levels.

Original post here with comment from a reader in favour of the ‘welfare state’ saying the debate is hardly a debate at all…

So it’s settled then, government spending saves the day.

Or, if you like something more academic, here is a great piece on the myth of the government spending multiplier.

UPDATE:  Take a look at this from fin24.com.   If there is too much debt coming to market SA will have to go to offshore capital markets and bear the currency risk that comes with it.  Higher foreign debt exposure is going to vex the ratings agencies even more… Plus, with a $5 trillion G20 borrowing requirement in 2009-10, how much appetite will there be in the Eurobond market?

The simple solution is to stop spending.  It’s so simple it’s difficult I guess…