Fitch’s downgrade is a reactionary punishment for the debt-ceiling debate when the United States’ full-faith-and-credit ability to service our debt is under no threat.
America has received a AAA credit downgrade for just the second time in our history.
Fitch Ratings blamed its Tuesday demotion to AA+ on “a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters.”
Fitch’s downgrade is a reactionary punishment for the debt-ceiling debate when the United States’ full-faith-and-credit ability to service our debt is under no threat.
What is threatened is taxpayers’ ability to keep floating the toxic government bloat ruining our country’s financial future and driving inflation to painful levels.
As a former bond analyst with Moody’s Investors Service (a Fitch competitor that still maintains a Aaa-rating for the United States — the last of the big three agencies after S&P downgraded America under President Barack Obama in 2011), I do agree with Fitch about America’s bigger-picture debt problems.
But the company’s move seems geared more toward penalizing Republicans for trying to enact modest fiscal discipline by attempting to hold the line during the debt-ceiling debacle against wasteful programs like the CARES and “Inflation Reduction” Acts.
Fitch says its downgrade comes “notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025.
The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management.”
Fitch is more concerned with punishing Republicans trying to solve a long-term debt problem than in sounding the alarm over massive spending bills a Democratic White House and previous Congress rammed through.
