96
Fitch downgrades US credit rating, citing mounting debt and political divisions (apnews.com)
submitted 1 year ago by MicroWave@lemmy.world to c/news@lemmy.world
8 comments fedilink hide all child comments

The rating was cut Tuesday one notch to AA+ from AAA, the highest possible rating. The new rating is still well into investment grade.

top 8 comments
sorted by: hot top controversial new old
[-] MicroWave@lemmy.world 23 points 1 year ago

It’s only the second time in the nation’s history that its credit rating has been cut. In 2011, the ratings agency Standard & Poor’s stripped the U.S. of its prize AAA rating after a prolonged fight over the government’s borrowing limit. The Government Accountability Office, in a 2012 report, estimated that the 2011 budget standoff raised Treasury’s borrowing costs by $1.3 billion that year.

At the same time, the huge size of the U.S. economy and historic stability of the federal government has kept its borrowing costs low. Global investors often flock to U.S. Treasury securities during periods of economic turmoil, lowering the interest rate paid by the U.S. government.

[-] GiddyGap@lemmy.world 21 points 1 year ago

Embarrassing, but fully deserved. Thanks, Kevin.

[-] autotldr 11 points 1 year ago

This is the best summary I could come up with:

The Government Accountability Office, in a 2012 report, estimated that the 2011 budget standoff raised Treasury’s borrowing costs by .3 billion that year.

Global investors often flock to U.S. Treasury securities during periods of economic turmoil, lowering the interest rate paid by the U.S. government.

It said U.S. governance has declined relative to other highly rated countries and it noted “repeated debt limit standoffs and last-minute resolutions.”

Fitch produced a report last year that showed government stability declined from 2018 to 2021, but increased since Biden assumed the presidency, said the person, who was granted anonymity to disclose private conversations.

Economists at the Federal Reserve made a similar forecast this spring but then reversed it in July and said growth would slow but a recession would likely be avoided.

[-] afraid_of_zombies@lemmy.world -1 points 1 year ago

I am downgrading Fitch citing that they suck

[-] UFO64@lemmy.world 3 points 1 year ago

The debt has become a political bargaining chip in the US. I’m amazed we are rated as high as we are…

[-] johnefrancis@lemmy.ca -2 points 1 year ago

Having a credit rating on the imaginary debt of the US is ridiculous.

The federal govt doesn't borrow US dollars - it creates US dollars.

It's impossible to default.

[-] chuckleslord@ttrpg.network 11 points 1 year ago

It's not impossible to default. It should be, but it isn't due to "debt ceiling" nonsense. Political instability is the cited reason for the downgrade and, yeah, makes perfect sense why that would be.

this post was submitted on 02 Aug 2023
96 points (100.0% liked)

News

23361 readers
3496 users here now

Welcome to the News community!

Rules:

1. Be civil

Attack the argument, not the person. No racism/sexism/bigotry. Good faith argumentation only. This includes accusing another user of being a bot or paid actor. Trolling is uncivil and is grounds for removal and/or a community ban. Do not respond to rule-breaking content; report it and move on.

2. All posts should contain a source (url) that is as reliable and unbiased as possible and must only contain one link.

Obvious right or left wing sources will be removed at the mods discretion. We have an actively updated blocklist, which you can see here: https://lemmy.world/post/2246130 if you feel like any website is missing, contact the mods. Supporting links can be added in comments or posted seperately but not to the post body.

3. No bots, spam or self-promotion.

Only approved bots, which follow the guidelines for bots set by the instance, are allowed.

4. Post titles should be the same as the article used as source.

Posts which titles don’t match the source won’t be removed, but the autoMod will notify you, and if your title misrepresents the original article, the post will be deleted. If the site changed their headline, the bot might still contact you, just ignore it, we won’t delete your post.

5. Only recent news is allowed.

Posts must be news from the most recent 30 days.

6. All posts must be news articles.

No opinion pieces, Listicles, editorials or celebrity gossip is allowed. All posts will be judged on a case-by-case basis.

7. No duplicate posts.

If a source you used was already posted by someone else, the autoMod will leave a message. Please remove your post if the autoMod is correct. If the post that matches your post is very old, we refer you to rule 5.

8. Misinformation is prohibited.

Misinformation / propaganda is strictly prohibited. Any comment or post containing or linking to misinformation will be removed. If you feel that your post has been removed in error, credible sources must be provided.

9. No link shorteners.

The auto mod will contact you if a link shortener is detected, please delete your post if they are right.

10. Don't copy entire article in your post body

For copyright reasons, you are not allowed to copy an entire article into your post body. This is an instance wide rule, that is strictly enforced in this community.

founded 1 year ago
MODERATORS
rjc@lemmy.world
Thekingoflorda@lemmy.world
Tenthrow@lemmy.world
JonsJava@lemmy.world
gedaliyah@lemmy.world
little_cow@lemmy.world
jeffw@lemmy.world
enu@lemmy.world