Which explains why American stocks and bonds are on the move, as Greece’s credit cut by Moody’s sends investors scrambling to find “safe” investments. Right now America is the best of a bunch of bad choices for investors.

From CNBC:

Moody’s on Monday downgraded Greece government bond ratings into junk territory, citing the risks in the euro zone/IMF rescue package for the debt-laden country.

The agency downgraded the rating by four notches to Ba1, placing it one notch into junk status. The outlook is stable.

Moody’s [MCO  19.93    0.25  (+1.27%)   ] also downgraded Greece’s short-term issuer rating to not-prime from Prime-1.

The rescue package “effectively eliminates any near-term risk of a liquidity-driven default and encourages the implementation of a credible, feasible, and incentive-compatible set of structural reforms, which have a high likelihood of stabilizing debt service requirements at manageable levels,” said Moody’s senior analyst Sarah Carlson.

“Nevertheless, the macroeconomic and implementation risks associated with the program are substantial and more consistent with a Ba1 rating,” Carlson added.

As usual CNBC gets it wrong later in the piece, claiming the announcement trimmed gains form the market while ignoring the fact that Greece’s problems destabilizing the Eurozone is at the root of the American stock rally.

Here’s a question. Moody’s made the announcement in the middle of our trading day which would mean European markets were likely already closed. Isn’t this something European investors would have liked to know when they could do something about it?

If the economy was really recovering tax receipts would be up (including sales taxes) and public sector employees would be secure in their positions. But if America had actually stopped generating any wealth and is just digging itself into a deep hole by spending all sorts of money just to make it look as if things were going well (like hiring almost half a million census workers in an effort to manipulate job numbers) then we would assume that eventually the state would begin to show signs of running out of money as their unsustainable programs get into full swing.

This little tidbit seems to verify that those who believed the latter were right all along:

WASHINGTON — President Obama is pressing Congress to approve emergency aid money to support economic recovery and help avoid widespread layoffs of public workers, the Washington Post reported Saturday.

Congressional leaders received a letter from the president asking for almost $50 billion for distribution to state and local governments, saying that increased spending is “urgent and unavoidable,” the Post reported. The money would protect the jobs of teachers, police and firefighters.

“Because the urgency is high—many school districts, cities and states are already being forced to make these layoffs,” Obama wrote, “these provisions must be passed as quickly as possible.”

Obama’s plea comes despite last year’s $787 billion economic stimulus package, which worked to stabilize the failing economy, but did little to help the country’s high unemployment rate. At 9.7 percent, unemployment is nearly the same as it was a year ago.

Whether the economy was stabilized or merely propped up temporarily is debatable. What isn’t is the fact that the temporary “stabilization” of the economy is completely unsustainable. The government and the public sector generate no wealth, they only consume it. The only recovery a country like the U.S. can have is one in which their is robust growth in private sector employment which would also mean a growth in tax revenue which would shore up the public sector. Now that the Democrats have gone on a nationalization spree however there is very little private sector left in the economy.

Once Obamacare kicks in and the government starts to consume the energy sector the government will control upwards of 60% of the economy. All those industries will eventually be supported by the taxes levied on the 40% of inudsty that is private sector, which would at that point consist of retail sales, entertainment and I guess strip clubs. Obama’s agenda seems to be to nationalize the sectors that are the most lucrative. How is this sustainable?

The “green shoots” are only visible to bureaucrats because by and large they are the people benefiting from Obamanomics. The rest of us are going to be impoverished serfs propping up a unionized elite. Until of course we’re bled dry. The sort of good news is that long before we’re sent to work camps to grow Arugula the debt will collapse the economy and the fat public sector drones who support these policies will starve to death. That Obama doesn’t see this makes is much vaunted intellect suspect:

Obama, however, expressed that spending and national debt reduction could go hand-in-hand.

“These measures to jump-start private sector job creation, avoid massive layoffs at the local and state levels and help the unemployed are critical and timely ways to further that economic recovery,” the president wrote, adding that “robust economic growth is essential for achieving deficit reduction.”

Lawmakers remained skeptical.

“Democrats are showing either that they just don’t get it on this issue of the debt, or that they just don’t care,” Senate Republican Leader Mitch McConnell said in a reaction to the letter. “You can understand the American people’s skepticism when they’re told that simply adding more government is the solution to government’s previous failures.”

Actually they don’t understand it. Obama thinks that rich people are so rich they can indefinitely fund ever increasing taxes, but worse he buys into the Keynesian lie that the way to grow an economy is to hand out money to parasites taken from the productive. Argue all you want, but the Keynesian programs have failed. The economy isn’t recovering and another $50,000,000,000 is only accelerating the collapse of our economy.

But at least we can pretend things are good for another couple of months.