Will America succumb to the same fate as Japan?

WASHINGTON (AP) — Most Americans think jarring economic problems will erupt if lawmakers fail to increase the government's borrowing limit. Yet they're torn over how or even whether to raise it, leaning toward Republican demands that any boost be accompanied by spending cuts. According to an Associated Press-GfK poll, 53 percent say that if the debt limit is not extended and the U.S. defaults, the country will face a major economic crisis. An additional 27 percent say such a crisis would be somewhat likely, while just 17 percent largely dismiss the prospects of such damage.

LONDON — The United States could lose its top credit rating for the second time if there’s a delay in raising the country’s debt ceiling, Fitch Ratings warned Tuesday.

By Plan B Economics:It may not happen next week, but it will happen. It appears that Japan is on an unstoppable path to financial Armageddon.Over the past 20+ years, the Japanese economy has unwound the excesses caused by a giant property and financial bubble. At the same time, the country's aging demographics has increased social costs while the pool of taxable labor declined. Consequently, Japan has stagnated and repeatedly dipped into deflation.

Article written by Prieur du Plessis, editor of the Investment Postcards from Cape Town blog.This post is a guest contribution by Rebecca Wilder, author of the News N Economics blog.

Moody’s Investor Service, the credit rating agency, will fire a warning shot at the US, saying that unless the country gets public finances into better shape than the Obama administration projects there would be ‘downward pressure’ on its triple A credit rating.