Not trying to be political here, I just want to state some historical facts and perspective and give you my prediction for the future of the US.

When Canada was dropped to AA+ back in the '90s it amounted to a half point increase in interest rates but that in itself didn't last that long. It normalized over time. At the time the Federal Government was about 73% debt to GDP (which is less than what the US is now). After some severe cutting (approx. 14% of the budget) and increases in taxes, off-loading onto the provinces, deferred projects, practically wiped out our own military, etc. We honoured every debt because the consequences of not doing so would have been much much worse. The ratio of cutting spending to taxes was about 6-1. A value-added tax (the GST) replaced the hidden manufacturers tax and and added revenue. The reasoning is that a VAT is inherently more fair than an income tax as it is a tax on consumption. After about 8 years, the deficit came under control and then we enjoyed many years of surplus budgets until the crash of 2008 required stimulus monies. The bond agencies liked that and returned the AAA rating. Unfortunately, a few of the provincial governments (Quebec and Ontatrio) haven't learned their debt lesson and kept on spending and need some austerity.

We had to endure all kinds of name calling by the international community who likened our currency to the Canadian peso and being called an honoury third-world country. The CDN dollar dropped to 0.62 US dollar.

The insults hurt. That's why I tend to temper any comments regarding the US economic position even though the US is in worse financial shape now they Canada ever was.

We were lucky, in the sense that the world was on an economic upturn during our recovery and our expanding resource base helped us grow out of the situation. We've got resources that the rest of the world needs and especially our neighbour to the south.

I would expect that it would take at least 8-15 years before the US economy can recover and that's if the stars are aligned and the US goes back to the gold standard. Unemployment is going to remain very high. Current real unemployment is about 16% when you included the discouraged non-searchers not the fabricated 9.2%. Employment is the real driver of the economy. If interest rates moderate a couple of percentage points, the worse the debt situation will be, BUT people will be off the "cheap money" borrowing that stimulates inflation and encourages more debt. That time frame estimate is IF your government ever gets serious about handling the debt issue. 2.4T cuts is only a first step. Considering the US has more headroom and leeway to increase taxes than practically any nation on earth, an increase in taxes should be in the mix to recovery. I think the cuts should be closer to 5-6T and add an additonal 2T in taxes revenue. This will hurt the unemployment but in the medium and long term it will stimulate the economy because of less debt.

I have no economic degree (just a 2yr diploma) nor am I particularly wise about handling money as I was once down and nearly out financially. JMHO. I have to wish America all the best because 70% of our economy is tied to yours. (I, we, us) can't afford to throw stones even though you will hear a lot of this in the coming months and years.