Also, focusing on gross debt may make the situation look better than it really is for the U.S., since Japan's is so high relative to debt held by the public. Japan's publicly held debt was 66.3 percent of GDP when it lost its AAA rating, compared with the current U.S. level of 72.7 percent.

Second, one might argue that it is unthinkable that the U.S. would ever default, so it should always have a solid AAA rating.

Think again. As debt levels rise, a fiscal situation can become simply impossible, making default inevitable.

And it can happen here.

Since its founding, the U.S. has defaulted on its debt twice. The first time, in 1790, it deferred payments on money owed stemming from the Revolutionary War. While the dollar values were eventually repaid -- 10 years later -- the delay was technically a default.

No Gold

The second time, in 1933, the U.S. blatantly broke its obligation with creditors by refusing to repay loans in physical gold. Existing contracts stated that lenders could request payment in either dollars or gold, but President Franklin Delano Roosevelt and Congress, with plans to significantly inflate the dollar, passed a law forbidding repayment in gold. Again, the dollar values were repaid, but unilaterally changing the terms of a contract is the equivalent of a default.

The failure of the ratings companies to identify the riskiness of real estate loans clearly contributed to the financial crisis. If, given the evidence, they fail to act responsibly and change the U.S. credit rating soon, they will be setting investors up for yet another fall.

David Fuller's view The 28-year bull market in US 30-year Treasury Bond Yields ended with the climactic downward acceleration in December 2008. Fullermoney maintains that the next significant move will be upwards.