I don't think this is correct. Planet Money did a recent podcast on this very subject (Would A Downgrade Matter?)[1], and they concluded that a downgrade from A

I don't think this is correct. Planet Money did a recent podcast on this very subject (Would A Downgrade Matter?)[1], and they concluded that a downgrade from AAA to AA+ doesn't matter very much in the long run. Yes, it's somewhat embarrassing, and interest rates are likely to go up _slightly_, but that's about it. The big leap is from "investment grade" securities to "junk bonds" ('BB'/'Ba' or less). We're still a long way from there. [1]: http://www.npr.org/blogs/money/2011/07/28/138721364/ http://www.npr.org/blogs/money/2011/07/28/138721364/