To say that this idea is absurd truly underestimates the meaning of the word. I understand the notion of getting rid of any future uncertainty over whether or not funding will be available to pay off bondholders by eliminating the all limitations on the amout debt the Government can issue. However, this idea makes me wonder if the people running Moody's might perhaps be a consortium of "mentally challenged," aka retarded, individuals. This nonsensical statement by Moody's is Orwellian in the extreme...
As Ron Paul argues eloquently and logically in the link below, the only way to solve what is right now a seemingly unsolvable problem is to start taking a giant butcher's knife to the entire Government, across the board.
As Congressman Paul states, we need to first start by drastically reducing the "sacred cows" of defense spending, entitlements and Social Security/Medicare:
These three budget items already cost nearly $1 trillion apiece annually. This means we can cut every other area of federal spending to zero and still have a $3 trillion budget. Since annual federal tax revenues almost certainly will not exceed $2.5 trillion for several years, this Act cannot balance the budget under any plausible scenario.The heart of the underlying issue is the overall size of Government and Congress needs act against Obama and Bernanke and start aggressively reducing the size, power and scope of Government: Here is the link to Mr. Paul's speech, and I would urge everyone to read it: LINK
As Milton Friedman famously argued, what we really need is a constitutional amendment to limit taxes and spending, not simply to balance the budget. What we need is a dramatically smaller federal government; if we achieve this a balanced budget will take care of itself.