$13,452,824,735,772 and counting, should US government debt be rated junk?

The most newsworthy nation to currently be rated junk status is Greece. The 5-year credit default swaps for Greece are trading at 916 bps. The 5-year credit default swaps for U.S. are trading at 49 bps, which has a AAA credit rating. In contrast, when we look at the key ratios to analyze a nation's debt they appear very similar between the United States and Greece

The key ratios: Greece vs. United States
Deficit as % of GDP

• US: 10.4%
• Greece: 13.6%

Debt as % of GDP

• US: 86.5% (including GSE debt: 121.6%)
• Greece: 115.1%

Debt as % of revenue

• US: 358.1%
• Greece: 312.2%

Sources: Hedgeye, Morgan Stanley and CBO. 2009

In order to deal with the debt problem, Greece was forced to implement a $30 billion austerity program, while America continues to add to its deficits. I bring this up for two reasons:

1) Last week, a top German economist, Hans-Werner Sinn, warned that current austerity program risk a civil war in Greece.

2) Just last month Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, said that national debt is the single biggest threat to national security.

So, should U.S. government debt be downgraded to junk status? The market will eventually decide. Read the whole story here.