United States Deficit Essay Example | Topics and Well Written Essays - 500 words

United States Deficit - Essay Exampleof the Federal Reserve, 6 % of State and Local Government, domestic and private investors 32% and the major portion of was the international investor who offered 46 %. These are the four most important places where U.S was able to suck money from. The international investors like BP, DaimlerChrysler, ING group which are located in different countries like U.K and Netherlands provided the U.S with a major portion of the credit. Once this money is borrowed, both parties have to come into an sympathy on how the interest will be paid. Once the U.S has borrowed money, they will pay the interest rates depending on each countries agreement with the U.S government. They can also exchange privileges. This means that that the U.S government can give an investor the opportunity to be able to switch from one mutual fund to another(prenominal) with the family without paying sales charges.Credit pass judgment is a method used to evaluate the credit worthines s if a debtor and this can be a business or a government. This is done by a credit military rating agency like Moodys, Fitch Ratings and Standard & Poor. . The credit rating of a government like U.S is a financial indicator to potential investors of securities like bonds. The Credit rating agency Standard and Poor (S&P) downgraded its credit rating of the U.S federal government from AAA (outstanding) to AA+( excellent) by the third quarter of the year 2011. This seems not to be good news to the U.S as international implication of mankind deficit will lead to higher current accounts deficit, it will also increase the risk of capital letter flight this affecting the image of the country. This will attain international investors to shy away from investing in this country.The current account is a component of the balance of payment while the other being capital account. The current account balance measures the nature of a countrys foreign trade. The capital account determines how int ernational capital flows and investment are save in the capital