budgetary adjustment

The threat last month of a downgrade of the United States’ federal debt by the rating agency Standard and Poor’s was in a way merely a confirmation of what market participants and observers already knew: US fiscal policy is unsustainable. But the symbolic significance of S&P’s assessment was huge, for it underscored an inescapable truth: worries about public debt that were once confined to a few delinquent countries are now bearing down on the world’s biggest and richest economies.