The only means by which the US government has been able to maintain the legitimacy of its power is to borrow over $32T. If not for that, it would have significantly diminished influence and have lost even more trust than it already has. This is the beginning of the regression to the mean and the rating is still arguably generous.
Well every now and then they stop paying their public servants while they argue over exactly how much deficit they can run at so ... why is the rating not worse?
Being in charge of the army and money printer just makes the risk with them even higher, not lower.
> Fitch late on Tuesday lowered the US long-term rating one rung from triple A to double A plus, citing the country’s growing debt burden and an “erosion of governance”, including on fiscal matters. The action came two months after the country narrowly averted default amid political wrangling over the federal borrowing limit.
This seems like a pretty fair and accurate assessment. If the United States wants to continue to promote itself as a beacon of stability, democracy, and being the shining city on the hill, the current status quo needs to change.
It seems like a debt ceiling fight is now just part of the standard political theater. Every so often the country starts heading towards the cliff edge and every time thus far it's been pulled back. Eventually the other shoe will drop however and when it does, that's going to hurt.
I really fear that someday one of these debt ceiling standoffs is really going to hit the fan, the credit rating takes a big hit, and the expense and loss of world standing could be catastrophic.
This June, 2023 was not a government budget (that causes a shutdown), but a government debt limit to pay existing debts; of which, the comparisons are 2011... and when the US left the Silver standard.
Certainly that called into question at least the AAA standing, though the possibility of total default or even long delays is unlikely.
Looking at what Sen. Tubberville is doing with the senior military confirmations, the possibility that someone could cause an actual default can't be ignored.
Seems reasonable to me. In short term fed and government is there to do enough tricks to pay it back and really there is not many better options. As investor I would guess I can pawn it off to someone else for a quite good while.
On other hand the debt levels with current rates are moving towards unsustainable direction... And spending doesn't seem to be helping this. So downgrade is likely in order.
He should be angry at Republicans for all their posturing and holding the economy hostage just to try to push their wildly unpopular political agendas, not at the organization calling them out for how wildly mismanaged their financial rules seem to be.
> Fitch late on Tuesday lowered the US long-term rating one rung from triple A to double A plus, citing the country’s growing debt burden and an “erosion of governance”, including on fiscal matters. The action came two months after the country narrowly averted default amid political wrangling over the federal borrowing limit.
So you are trying to solely blame republicans yet completely ignore what the company doing actual downgrading said. We don't have to guess here, you just have to read what they said. I quoted it above for you so don't have to scroll back up.
I don't see Fitch saying its only because of republicans and their posturing but I do see them say its because of the growing debt burden. Take at look at who controlled the house when the debt burden was added. I'll give you a hint, a majority of it was not added by republicans. In fact this fiscal year, 1.6 trillion has been added to the debt. I would argue that is a major factor in the downgrade, because the organization doing the downgrading said it was.
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[ 4.9 ms ] story [ 77.0 ms ] threadBeing in charge of the army and money printer just makes the risk with them even higher, not lower.
This seems like a pretty fair and accurate assessment. If the United States wants to continue to promote itself as a beacon of stability, democracy, and being the shining city on the hill, the current status quo needs to change.
It seems like a debt ceiling fight is now just part of the standard political theater. Every so often the country starts heading towards the cliff edge and every time thus far it's been pulled back. Eventually the other shoe will drop however and when it does, that's going to hurt.
Looking at what Sen. Tubberville is doing with the senior military confirmations, the possibility that someone could cause an actual default can't be ignored.
On other hand the debt levels with current rates are moving towards unsustainable direction... And spending doesn't seem to be helping this. So downgrade is likely in order.
So you are trying to solely blame republicans yet completely ignore what the company doing actual downgrading said. We don't have to guess here, you just have to read what they said. I quoted it above for you so don't have to scroll back up.
I don't see Fitch saying its only because of republicans and their posturing but I do see them say its because of the growing debt burden. Take at look at who controlled the house when the debt burden was added. I'll give you a hint, a majority of it was not added by republicans. In fact this fiscal year, 1.6 trillion has been added to the debt. I would argue that is a major factor in the downgrade, because the organization doing the downgrading said it was.