https://www.zerohedge.com/econ...n-erosion-governance

"Arbitrary... Outdated!" - Yellen Outraged After Fitch Cuts USA's AAA-Rating



Fitch downgrades US credit rating over rising debt, repeated standoffs

https://thehill.com/business/4...-repeated-standoffs/

Fitch Ratings downgraded the credit rating of the U.S. on Tuesday, saying the country’s growing debt and repeated standoffs over the borrowing limit make it less trustworthy then before.

Fitch downgraded the U.S. from a rating of “AAA” to “AA+” after several years of high-risk partisan battles over the debt limit. Those battles, Fitch said, have led to a spiraling national debt and a lack of faith in the U.S. government to handle it.

“There has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025,” Fitch wrote.

“The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management.”

Fitch’s downgrade comes roughly three months after President Biden signed a deal to raise the debt limit just days before the U.S. was expected to default on the national debt.

Fitch warned then that the growing debt — now well over $32 trillion — and Congress’s inability to manage it in a productive and responsible way posed threats to the country’s creditworthiness.

Fitch also cited “increased political polarization and partisanship as witnessed by the contested 2020 election” in its June warning. The agency released its Tuesday downgrade within moments of former President Trump’s indictment for his conduct on and leading up to Jan. 6, 2021.

The downgrade is an embarassing blow for the U.S. government, which had long been considered one of the safest borrowers in global finance.

Biden and the Fed...Destroying this country!

Didn't the credit rating get downgraded once before? During the Obama Administration?

If any of us had the proportionate level of debt as the US government, our FICO scores would be <300.

quote:

Originally posted by egregore:
If any of us had the proportionate level of debt as the US government, our FICO scores would be <300.

Sheeeeeeiiiit. More like it'd be so bad that Silvio and the boys would be paying us a visit on behalf of Mr. Fico to break our knee caps.

Most other major countries are in worse shape than the US, many are much worse.
I'm not sure I take comfort in that, but it's the way it is.

https://en.wikipedia.org/wiki/...ies_by_credit_rating

quote:

Fitch downgraded the U.S. from a rating of “AAA” to “AA+” after several years of high-risk partisan battles over the debt limit.

FFS, that is not the problem. The Congressional Critters spend a few hours a year making speaches and TV appearances with faux outrage. The problem is the rest of the year they create debt and inflation with reckless abandon.

If they were a corporation, they wouldn't be spending so much money on redundant bureacracy. Two examples out of the hundreds:

20+ agency free food programs

COVID exposed the redundancy between CDC and a little known NIH institute called NIAID

“Fitch downgrades US credit rating over rising debt, repeated standoffs.”

The story is not surprising because half the Congresspeople have low credit scores these days. So what do you expect when you put them in charge of the country?

For context, Fitch is only one of the three main credit rating agencies (which are different from credit reporting agencies, which rate individuals). Besides Fitch, the other two are Moody’s and Standard & Poor. It’s only one of them so far. Still, its big news Fitch downgraded the U.S. for the first time ever, from the best rating, AAA, to second best, AA+. As far as its reasons, the agency cited politicization of the budget, a record-setting level of debt, and no plan to deal with an aging population.

In other words, Fitch is appalled how fast the U.S. government is spending money. They’re spending money like it belongs to someone else or something.

The implications of the downgrade are potentially enormous. The lowered credit rating signals higher risk, which means U.S. treasuries will have to pay higher interest rates, making borrowing more difficult and expensive. The change could cause banks to go under as their bond assets are re-valued lower. And it could cause the dollar to lose value against other currencies.

Thanks Joe Biden!

Is it too late to take the Congressional credit card away? Or won’t that work, since they can just print more bills? I suspect Biden is going to keep on printing money. After all, he has a Proxy War to pay for.

You can keep on printing money until you can’t. But the good news is at that point, it’s all over fast. And pretty much everyone knows it, which makes us wonder how much longer Wall Street will allow this disastrous regime to continue.

https://www.coffeeandcovid.com...ack&utm_medium=email

Comical that we still have an AA+ rating and even more hilarious that Yellen is complaining about it. Under very few scenarios do we even have the ability to pay our debt off...and there is absolutely nothing to suggest we will suddenly acquire the political willpower to pay off debt in the future.

quote:

Originally posted by bdylan:
Comical that we still have an AA+ rating and even more hilarious that Yellen is complaining about it. Under very few scenarios do we even have the ability to pay our debt off...and there is absolutely nothing to suggest we will suddenly acquire the political willpower to pay off debt in the future.

We will soon be struggling just to pay the interest on the debt. The actual debt is not going away unless we default.

quote:

Originally posted by goose5:
Didn't the credit rating get downgraded once before? During the Obama Administration?

S&P downgraded the US to AA+ in 2011 and that rating remains in place. So this isn't exactly earth-shaking news.

Thank you. I thought my memory was intact. So, Fitch is another outfit. How many outfits are there?

The Biden admin just came out with a statement that this is a "Trump Downgrade" a direct result of MAGA policies.

quote:

Originally posted by Genorogers:
The Biden admin just came out with a statement that this is a "Trump Downgrade" a direct result of MAGA policies.

I mean, it's not THEIR spending.

quote:

Originally posted by goose5:
Thank you. I thought my memory was intact. So, Fitch is another outfit. How many outfits are there?

3 - Fitch, S&P, and Moodys.

We should have a co-signer.

^^ Ten percent to that fig pie.

They knew this was coming. That explains why they’ve been crowing about how strong our economy is for a month.

quote:

S&P downgraded the US to AA+ in 2011 and that rating remains in place.

So two of the three credit raters have us as less than stellar now?

This message has been edited. Last edited by: egregore,