Problem
Ben Stein wrote an open letter to Henry Paulson, just after Paulson was appointed U.S. Treasury Secretary in May 2006, arguing that America was facing a dire economic future: Just to give you an idea what you are up against, Standard & Poor's issued a warning not long ago. The caution was that if the United States government did not seriously alter fiscal policy, Treasury bonds would be downgraded to BBB, slightly above junk status, by 2020. This is a stunning piece of news for the world's most highly rated security denominated in its primary reserve currency. The S&P report said further that if the nation did not make serious changes after that, by 2025 Treasuries would be junk bonds, like the bonds of less successful emerging-markets nations.
What kind of problems implied here would reduce U.S. government bonds to "junk" status? What policies enacted today could eventually eliminate these problems?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.