William Rainer
The US as a nation has held an AAA rating for many years, the highest rating, however in 2011 it dropped to AA+ and now it has dropped again.
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For starters, there are three major groups that keep up with the appropriate credit scores of many institutions including nations as a whole. S&P, Moody’s, and Fitch are those three major players. The major group that decided to drop the rating today is Fitch. Furthermore, the ratings are very similar to personal credit scores, simply applied to companies and governments. The point is to help investors understand the risk involved with investing in the entity, in our case the government. The lower the score the higher the risk.
The US rating has a good history of being one of if not the most steady high scoring governments, maintaining AAA for many years. On S&P’s scale it did drop under the Obama administration in 2011 to an AA+. Now we see a similar scenario with Fitches scale.
US Gov Credit Rating Drops For First Time Since 2011
There are many reasons for Fitch’s decision on the US credit. To put it simply, the US government has proved to be much less stable than in past years. According to Reuters, the downgrade was brought in light of the debt ceiling struggle: “In Fitch’s view, 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.” Additionally Fitch pointed out the sustained higher interest rates, and importantly the fairly consistent irresponsible spending by the government.
Due to all of these factors political parties on both sides have used bits and pieces of the statements at Fitch and are in disagreement with the new ratings. The White House claims the new ratings are a mistake because Bidenomics are working so well. They also are quick to point out the Republican’s shortcomings with the debt-ceiling situation. On the other hand some Republicans have been quick to point out the overwhelming flaws of the Biden Administration and Bidenomics.
The fact of the matter is that our government as a whole needs some new leadership. While some of one political party have been twiddling their thumbs and merely talking, the other party has been frivolously spending US tax money on fights that are not our own and projects that have no bearing in reality. The rating by Fitch is not economy ending; it is merely AAA to AA+, however it is telling of the government’s ever worsening trend of failure to run our country.
Read More: White House Press Secretary Says ‘Strong’ Economy Is ‘Because Of Bidenomics’ (Video)
