The Great Recession has dramatically shrunk the time left to prevent a full-blown sovereign debt crisis as the demographic time-bomb threatens, US rating agency Moody's has warned.
Moody's fears that the US will crash through its safety buffer by 2013 if growth falters with interest payments topping 14pc of tax revenues. The debt-to-revenue ratio has already doubled in three years to 430pc.The US, UK, Germany, France, and Spain are all at risk of an "interest rate shock", either because they must roll over a cluster of short-term debt (US, France, Spain) or because deficits are so large.
