Today's Outrage: Worry Not About U.S. Debt

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The so-called credit ratings agencies have proven the depth of their insight and analytics once more.

Standard & Poor's(MHP Quote), with its enormous capacity to see no evil, determined that the massive U.S. government debt -- including $3 trillion for the financial bailout alone - is still worthy of the highest rating.

Last month, Moody's Investors Service (MCO Quote) said the same thing.

Both agencies issued cautionary statements and expressed concern about the weakening of public finances and the sagging short-term economic outlook. But they couldn't bring themselves to actually take action.

Remember, these are the agencies that blindly granted their top ratings to so many of the funky mortgage-related securities that nearly toppled the global credit markets. Clearly they know what they are doing.

Also remember that in many ways, these agencies resemble the research departments at the major investment banks. You know, the analysts that rarely say you should sell a stock. I guess they don't want to offend potential clients.

So despite the fact that the U.S. government has been working the mint overtime to print more dollars and has been issuing debt like there's no tomorrow, the credit rating agencies want you to know that everything is perfectly fine.

No need to worry about the trillions of dollars handed out to practically insolvent financial companies like AIG (AIG Quote) or the money the government borrowed to buy General Motors(GMGMQ Quote). Bond investors should look the other way when it comes to all of the government debt used to buy worthless stakes in Citigroup (C Quote), Bank of America (BAC Quote) and others.