The Biden administration is like a drunk on a bender.
The federal government won’t stop spending money until the country is flat broke and so deep in debt that the U.S. economy bottoms out and it is forced to sober up.
If you’ve wondered about the consequences of the U.S. sending billions of dollars to Ukraine or pumping out stimulus money during the pandemic — more than $280 billion of which was stolen by fraudsters — all you have to do is go to the grocery store.
The defense contractors and crooks may be getting rich, but the average Joe is getting poorer by the day.
So it shouldn’t come as a surprise that Moody’s Investors Service changed the outlook on the U.S. credit rating to negative on Friday. While Moody’s did not downgrade the nation’s AAA rating, the negative outlook is an obvious signal it is considering it.
“In the context of higher interest rates, without effective fiscal policy measures to reduce government spending or increase revenues, Moody’s expects that the US’ fiscal deficits will remain very large, significantly weakening debt affordability,” the agency said in a news release.
Moody’s is the last of the three major credit rating agencies to assign the U.S. an outstanding rating of AAA, CNN Business reported.
The other two, Standard & Poor’s and Fitch Ratings, have already chopped the U.S. score to AA+. Fitch made the move in August due to a “steady deterioration in standards of governance.”
I’m no economist, but every time I hear something about the Biden administration pledging billions of dollars to crazy schemes like “catalyzing global climate action,” I wonder how the government credit rating is not a C- at best.
If and when Moody’s does lower the U.S. rating, it’s definitely going to hurt.
Is our national debt at crisis levels?
Yes: 100% (101 Votes)
No: 0% (0 Votes)
“Even the prospect of a US downgrade could hurt Americans’ investment portfolios, make it even more expensive for them to borrow money, and make it more costly for the government to pay off its debts,” CNN reported.
According to Moody’s, the negative outlook is fueled by the partisanship in Washington.
“In Moody’s view, such political polarization is likely to continue,” the news release said. “As a result, building political consensus around a comprehensive, credible multi-year plan to arrest and reverse widening fiscal deficits through measures that would increase government revenue or reform entitlement spending appears extremely difficult.”
Of course, the Biden administration came ready with the rose-colored glasses.
“We disagree with the shift to a negative outlook. … The American economy remains strong, and Treasury securities are the world’s preeminent safe and liquid asset,” Deputy Secretary of the Treasury Wally Adeyemo said.
They may not agree with it, but they’re still going to blame it on Republicans.
White House press secretary Karine Jean-Pierre claimed the move was “yet another consequence of Congressional Republican extremism and dysfunction,” according to CNN.
Moody’s will review U.S. debt in more depth before deciding if a credit rating downgrade is warranted, the outlet reported. The review should be completed in one to three months.
I hope we have that long before the bottom falls out.
