Editor's Note: This story was updated at 9:42 a.m.

Standard & Poor's isn't the only ratings agency with doubts about U.S. debt—or politicians' ability to come to grips with it.

In a note reaffirming Moody’s AAA rating of U.S. debt early this morning, Moody’s analyst Steven Hess wrote: "For the AAA rating to remain in place, we would look for further measures that would result in the ratio of federal government debt to GDP, for example, peaking not far above the projected 2012 level of near 75 percent by the middle of the decade and then declining over the longer term. Last week's agreement (on the U.S. debt ceiling) suggests that coming to an agreement that would meet this criterion by early 2013 will be challenging, given the political polarization, but not necessarily impossible."

Also this morning, S&P downgraded Fannie Mae and Freddie Mac, the mortgage lenders controlled by the government, to AA+ from AAA. The reason? The two were placed into conservatorship in September 2008, and "their ability to fund operations relies heavily on the U.S. government."

The Moody’s statement about U.S. debt this morning comes after a weekend in which world markets and governments worked to come to grips with S&P’s downgrade Friday evening of U.S. debt to AA+ status, the first such debt downgrade in the nation’s history. Moody’s and Fitch, the other two ratings services, still consider the United States to have a AAA rating, but one that is at risk.

Asian markets fell today on the news of Friday’s downgrade. U.S. stocks also tumbled more than 300 points by late this morning. Politicians in Washington over the weekend sniped at one another as they scrambled to downplay and discredit S&P’s decision. And leaders of the G-7 industrial nations vowed Sunday night to intervene in debt markets to ensure stability, as both Europe and the United States face debt crises.

With all of that happening, you'd think investors would be racing away from U.S. Treasury bonds, long considered one of the safest investments on the planet. You'd be wrong.

The interest rate on U.S. debt actually dropped as stock market uncertainty drove investors to the old standby. The rate was about 2.6 percent early this morning, thanks to robust buying of Treasury bonds.

"Treasury [bonds] are up because they are still the flight-to-quality instrument despite what S&P says," Thomas Roth, executive director in the U.S. government bond trading group at Mitsubishi UFJ Securities (USA) in New York, told the Wall Street Journal. "All that has occurred is more uncertainty which drives money out of risk assets."

That still leaves the long-term question, of course, for businesses and consumers of "How will this affect us?" In an interview on Fox News Sunday, S&P credit analyst David Beers said the move was unlikely to have much long-term impact on the interest rates charged to the U.S. government. If that’s true, that would be good news for businesses, which would also see higher interest rates on loans if the Treasury has to pay more.

But it might not be true without responsible action by politicians to reduce long-term spending trajectories or raise taxes or both, as the Moody’s report this morning emphasized.

In Washington

Politicians who took to the airwaves this weekend showed little of that responsibility. Instead, they attacked S&P for its downgrade and a $2 trillion accounting mistake the ratings agency made that administration officials, especially, said should have made S&P back off its decision.

And, of course, Republicans and Democrats blamed each other for the fix the nation is in.

The Treasury Department has criticized the decision by S&P, saying it was due to a math error of $2 trillion that affected the percentage of debt the United States would be carrying compared to the nation’s Gross Domestic Product.

But S&P officials, while acknowledging their math wasn't perfect, said its bottom-line conclusion was still sound. And one big reason for the move was because of the bickering political atmosphere in Washington, a situation they don't see improving anytime soon.

Against this backdrop, a Congressional committee is being appointed that has an awesome responsibility. The committee will have to cut the deficit, slow debt growth, and somehow assure the markets that Washington hasn’t lost its ability to solve those tough issues.

If the committee, and Congress and the White House, fail in that responsibility, the U.S. will not regain its top status from S&P, could lose its top rating from other agencies, and ultimately wind up paying more to finance its debt—squeezing consumers and businesses at a time the economy is already weakening.

Around the world

Officials from Japan over the weekend restated that they believed the U.S. remains a good risk.

That’s good news coming from the second-biggest lender to the nation.

The nation’s biggest creditor, China, has been consistently critical in recent months and weeks of the United States’ inability to get its fiscal house in order. It would be truly worrisome if Chinese officials put some of those words into action and sold off the debt it holds. But so far, that hasn’t happened.

European central bankers, concerned not just about the U.S. downgrade but the erosion of confidence in nation’s on the periphery of Europe, issued a statement Sunday night that they would intervene to bolster debt markets.

But markets in Asia weren’t buying it.

All of the key Asian stock markets fell today, with drops ranging from .88 percent to 3.79 percent on the Shanghai Composite Index and 2.17 percent on Japan’s Nikkei.

Kaushik Basu, chief economic adviser to India's government, told the Wall Street Journal, "The U.S. is the most powerful economy in the world; this is obviously a matter of great concern."

Financial Markets in the Week

Meanwhile, U.S. stocks appeared poised to continue the rocky ride that made last week a miserable one on Wall Street and worldwide.

Last week was a rough one for markets worldwide, including in the United States which saw a 512-point drop in the Dow on Thursday—the biggest singled-day loss in three years. The week was affected by the slowness of the debt ceiling debate and the worsening crisis over debt in European countries.

Many expect another wild week ahead. In the United States, the S&P 500, the broadest gauge of U.S. stocks, is in correction territory. And there’s no telling how traders around the world will react to the blow of having the investment in U.S. Treasury bonds long considered the safest of safe havens declared, well, not so secure.

“It’s a very emotional and volatile environment,” Kenneth S. Rogoff, a professor of economics at Harvard University, told the New York Times. “An event like this can sometimes trigger a reaction far in excess of what you might expect.”

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Kent Bernhard Jr. is News Editor of Portfolio.com