The Fitch Ratings cut in Ireland's sovereign grade last week is indeed depressing but it is only reflecting the reality of the mounting exposure taxpayers face as the economy sours.

Like a school essay grading, Fitch downgraded by two notches Ireland's sovereign grade to AA- from AA+. It skipped the interim AA grade, to bring Ireland three steps farther away from the beloved AAA rating enjoyed by most of the eurozone club.

The definition of the AA- grade is as follows: the country issues high-quality bond debt paper, which differs slightly from the bonds issued by other countries rated with the highest grade (AAA) due to some factor causing higher perceived long-term risk.

In Ireland's case, the perceived long-term risk is the fear that the taxpayer here is exposed to a still uncounted bill
for banks' growing losses from corporate and mortgage debt liabilities. In other words, the cost to the taxpayer through the additional losses of the corporate
and residential loans is not yet known if the world fails to pull strongly out of recession next year.

The big uncertainty is that corporate and mortgage debt will push up the debt pile even higher.

The good news is we are not alone and the downgrade was hardly news to international debt markets: last week the interest rate on Ireland's benchmark 10-year bond increased only six basis points. The worst that can be said is Ireland, paying an interest rate of 4.75%, is now with Greece, at 4.72%, grouped as one of the most risky eurozone countries.