U.S. High Debt Rating 'Unfair': Weiss

JUPITER, Fla. (TheStreet) -- Weiss Ratings on Thursday released its initial sovereign debt ratings for 47 countries, rating the United States a C (Fair), and ranking the U.S. 33rd on the list. Saying that "the AAA/Aaa assigned to U.S. sovereign debt by Standard & Poor's, Moody's and Fitch is unfair to investors and savers, who are undercompensated for the risks they are taking," Weiss Ratings president Martin D. Weiss added that an "honest rating" was needed to "help support the political compromises and collective sacrifices the U.S. must make in order to restore its finances."

Weiss Ratings president Martin D. Weiss

Weiss Ratings explained that under its sovereign debt ratings scale from A (Excellent) to E (Very Weak), only sovereign countries with "stellar scores" in for major areas - including debt burden, international stability, economic health and market acceptance - would "merit a grade of A-minus or better." Weiss said that the U.S. government didn't fall into either the excellent or very weak categories, as it ranks 44th for debt burden "primarily because of its large deficits," 32nd for international stability, "due mostly to low reserves," and 27th for economic health "because of recent boom-and-bust cycles." These low rankings were partially offset, as the U.S. ranked 6th " for its ability to borrow in the global marketplace." In its sovereign rating rankings, Weiss placed China in first place with a sovereign debt rating of A (Excellent), with Thailand also being assigned an A. Countries rated an A-minus include South Korea, Switzerland and Malaysia. Russia is ranked a B (Good), while Germany, Indonesia and Mexico are ranked C-plus (Fair), Under Weiss's sovereign debt ratings approach, Colombia, Estonia, Brazil, Japan and Canada are among the countries tied with the U.S. with C ratings, while Italy and the United Kingdom rank lower, with C-minus ratings. The lowest-rated countries are Ireland, with a D-minus (Weak) rating, followed by Greece, which is rated an E (Very Weak). When asked why Weiss rated Mexico, Bulgaria and the Philippines higher than the U.S., while unstable Columbia was tied with the U.S. with a C rating, Weiss's senior financial analyst Gavin Magor said "It should not come as a surprise that the U.S. fiscal problems are clearly reflected in the rating, but to realize how poorly it is performing relative to other countries demonstrates how urgent fiscal reform has become." Commenting on the United States' ability to continue its borrowing, Magor said "clearly the U.S. is reliant on its position as a global financial powerhouse to drive its way out of the great recession; the question is how it can find the delicate balance between fiscal prudence and austerity that could plunge the nation back into a recessionary morass." -- Written by Philip van Doorn in Jupiter, Fla. >To contact the writer of this article, click here: Philip van Doorn.