Ratings agency Moody's revokes top-tier AAA rating over escalating debt and mounting interest expenses.
The USA got kicked down a notch from Moody's, losing its coveted Triple-A rating and settling for Aa1. Gather round, folks, it's time to find out why Beavis and Butt-head screwed up this time.
Moody's, the credit gurus, slapped the USA with a downgrade due to a whopping rise in public debt and skyrocketing interest costs. They foresee these issues ballooning future deficits. So much for being the man!
Before this downgrade, only the mightiest nations—the European Union, Canada, and Germany—alongside some other cool countries like Austria and Finland, held a Triple-A rating from Moody's. Now, they can all laugh at us from the top of the credit mountain.
This is quite the fall from grace, considering Moody's was the last one holding out on downgrading. Fitch Ratings dropped the hammer in 2023, and S&P Global Ratings let the US have it back in 2011. Guess they aren't our BFFs anymore!
Brace Yourselves for More Pain
"The American government, along with Congress, has been deadlocked on agreements to rectify the persistent budget deficits and escalating interest costs," Moody's gruffly declared. They went on to state that they don't believezippythefiscalpolicy will reverse the trend anytime soon.
In other words, Moody's expects us to drown in debt as our spending continues to explode while our government revenues remain stagnant. What a bunch of pessimistic jerks, right? They think the USA's fiscal standing will worsen compared to other top-tier countries.
But no worries, Moody's wasn't all doom and gloom. They praised the USA's exceptional credit strengths, such as its massive economy, economic robustness, and the almighty dollar's role as the global reserve currency. They also gave a nod to institutional factors like the Federal Reserve's independence and the separation of powers between the executive, legislative, and judicial branches.
So, they still think we're pretty awesome, but they do express concerns about those "sometimes tested" institutional arrangements.
Our beloved Leader, Donald Trump, has promised us he'll do something about the national debt, which stands at a whopping $36 trillion. Let's just hope he doesn't mess it up worse than he did the hair on his head!
- "What about the impact of this downgrade on the country's business and finance sectors under present politics and general-news circumstances?"
- "The downgrade of the US's credit rating by Moody's, and the ongoing disputes in politics, may bring about increased financial strains and potential business repercussions in the future."
