reserve currency confers agovernment funding advantage, one that could change only slowly over time, andthat Fed policy might lean toward continued loose monetary policy at a time offiscal tightening. Nonetheless, it is possible that interest rates could riseif investors re-price relative risks. As a result, our alternate scenariofactors in a 50 basis point (bp)-75 bp rise in 10-year bond yields relative tothe base and upside cases from 2013 onwards. In this scenario, we project thenet public debt burden would rise from 74% of GDP in 2011 to 90% in 2015 andto 101% by 2021.Our revised scenarios also take into account the significant negativerevisions to historical GDP data that the Bureau of Economic Analysisannounced on July 29. From our perspective, the effect of these revisionsunderscores two related points when evaluating the likely debt trajectory ofthe U.S. government. First, the revisions show that the recent recession wasdeeper than previously assumed, so the GDP this year is lower than previouslythought in both nominal and real terms. Consequently, the debt burden isslightly higher. Second, the revised data highlight the sub-par path of thecurrent economic recovery when compared with rebounds following previouspost-war recessions. We believe the sluggish pace of the current economicrecovery could be consistent with the experiences of countries that have hadfinancial crises in which the slow process of debt deleveraging in the privatesector leads to a persistent drag on demand. As a result, our downside casescenario assumes relatively modest real trend GDP growth of 2.5% and inflationof near 1.5% annually going forward.When comparing the U.S. to sovereigns with 'AAA' long-term ratings thatwe view as relevant peers--Canada, France, Germany, and the U.K.--we alsoobserve, based on our base case scenarios for each, that the trajectory of theU.S.'s net public debt is diverging from the others. Including the U.S., weestimate that these five sovereigns will have net general government debt toGDP ratios this year ranging from 34% (Canada) to 80% (the U.K.), with theU.S. debt burden at 74%. By 2015, we project that their net public debt to GDPratios will range between 30% (lowest, Canada) and 83% (highest, France), withthe U.S. debt burden at 79%. However, in contrast with the U.S., we projectthat the net public debt burdens of these other sovereigns will begin todecline, either before or by 2015.Standard & Poor's transfer T&C assessment of the U.S. remains 'AAA'. OurT&C assessment reflects our view of the likelihood of the sovereignrestricting other public and private issuers' access to foreign exchangeneeded to meet debt service. Although in our view the credit standing of theU.S. government has deteriorated modestly, we see little indication thatofficial interference of this kind is entering onto the policy agenda ofeither Congress or the Administration. Consequently, we continue to view thisrisk as being highly remote.OutlookThe outlook on the long-term rating is negative. As our downside alternatefiscal scenario illustrates, a higher public debt trajectory than we currentlyassume could lead us to lower the long-term rating again. On the other hand,as our upside scenario highlights, if the recommendations of the CongressionalJoint Select Committee on Deficit Reduction--independently or coupled withother initiatives, such as the lapsing of the 2001 and