Yesterday Standard & Poor’s announced its sovereign rating of Greece would be maintained for the moment at triple-B. The birthplace of democracy recently navigated a hotbed of solvency issues, including downgrades to its sovereign rating, as Greece became the poster child for ‘how not to run your country’s finances.’ In parallel, the day before, Moody’s Investors Service said the United States risks losing its beloved triple-A credit rating if it doesn’t better manage its piles of debt. But more on that later, let’s start with what’s up with Greece: Simply put, the country’s own debt-management issues put it in hot water, financially, and now the rumor is that the EU may not bailout Greece to a large extent, potentially driving the country to go cap-in-hand to the International Monetary Fund. Hardly a confidence builder for a country that ranks relatively high on the Human Development Index. Needless to say, things have eased up a bit for Greece, though it continues to drag the Euro markets. Credit analyst Suki Mann of Société Générale remarked that, “Greece is off the front pages, [and] all of a sudden things are not looking too exciting: it’s a slow grind higher/tighter and heads down.” Reluctance, it seems, is once again rearing its ugly head: “We are all totally aware by now that European corporates are awash with liquidity and preserving it,” he said. Naturally, these events pushed sovereign risk into the market forefront once again. After all, even though Mohamed El-Erian CEO of PIMCO states that, “at present this is being viewed primarily – and excessively – through the narrow prism of Greece,” it is being viewed nonetheless. Who would have thought we’d be talking along these terms for the U.S.? But here we are. Greece was part of the EU, such a large machine, and the matter of it’s near insolvency still needs to be cleared up. It is only logical, regardless of any feelings of improbability, that as a matter of fact some other countries could be facing the same fate. It hurts just talking about it. “Today, we should all be paying attention to a new theme: the simultaneous and significant deterioration in the public finances of many advanced economies,” El-Erian said in a note on PIMCO’s website. “Down the road, it will be recognized for what it is: a significant regime shift in advanced economies with consequential and long-lasting effects.” I will be highly interested in how such a “significant regime shift” materializes though. For example, what is really known about sovereign risk? In the sense that what was really known, risk wise, about the mortgage market in the days before the credit crisis? If we (and themselves) were unaware that Greece was taking on such risk, then how can we be sure that the sovereign risk of the United States can conversely be properly accounted for, and what sort of calculations must be used to determine this? But enough questions. Ron D’Vari, CEO and Co-founder of NewOak Capital, a Manhattan advisory, asset management and capital markets firm said in a note to reporters that, more importantly, investors remain currently unconcerned about the U.S. credit rating. Yet he adds that: “if the current budget deficit trends continue, the interest servicing burden will approach those of the 80s,” however that the option of lowering interest rates is no longer available in today’s market. “Since the government is already in a box of not being to either lower spending or increasing already high taxes, the public finance will continue to deteriorate and the rating agencies may have to take action.” For the government’s part, however, they remain dismissive, with U.S. Treasury Secretary Timothy Geithner saying the country’s “political will” is hedge enough against downgrade. But for an even simpler way to wrap this, I refer to Joseph Mason, financial strategist and U.S. economics consultant, who said in an email, “insolvency is a problem of having debt greater than assets: more debt won’t help.” More debt, however, will grow the bubble bigger. One that’s popped elsewhere. And one that can pop here. Jacob Gaffney is managing editor of HousingWire and HousingWire.com