BIDENOMICS: America’s Credit Rating Downgraded Here’s Why That Matters
The only other time this happened in US history -- was under Obama
‘This downgrade is about debt and the ability to pay it back’ — Kevin O’Leary
Creditors have looked at America and decided we’re a bad risk.
We all know what happens if someone trashes their personal credit history. What a bad credit rating does to their ability to borrow and the kind of interest we have to pay when we take out loans. Well, the same thing can happen to countries that trash their credit ratings.
Just this week, America saw its credit rating downgraded for only the second time in history. The last time happened when Biden was Vice President and Obama was sitting behind the Resolute Desk.
To the surprise of precisely nobody, Biden is throwing the blame at Trump… the very same play Obama used in blaming Bush for anything that went wrong for almost his entire presidency.
President Biden’s administration is placing the blame for the United States’ drop in credit rating on former President Donald Trump and the Jan. 6 riots.
Fitch announced Tuesday it has officially downgraded the United States’ long-term foreign-currency issuer default rating to “AA+” from “AAA,” saying the downgrade “reflects the expected fiscal deterioration” and the nation’s heavy debt burden.
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The official told FOX Business that Fitch repeatedly cited Jan. 6 as a factor in their decision, considering instability of governance as an aspect of the downgrade in rating. —FoxBusiness
The GOP points to other reasons. Specifically, decisions that fall directly on Biden’s own shoulders.
Remember when Joe tried to play chicken on the Debt Ceiling because he wanted to blow out the budget even more than he eventually did? That played a factor.
Fitch, one of the “Big Three” credit rating agencies, issued a shock decision to downgrade the country’s debt rating from the top level, AAA, to AA+. The company blamed “expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance,” which it said led to “repeated debt limit standoffs and last-minute resolutions.”
Biden’s GOP critics said it was Biden’s weeks-long refusal to negotiate with Republicans on the debt limit earlier this year, as well as his expensive progressive policies, that led to the downgrade.
“When Fitch specifically cited the problem of ‘last minute’ resolutions they may as well have noted Biden’s refusal to negotiate with Republicans for months, while insisting on even more wasteful spending,” House Ways and Means Committee Chair Jason Smith, R-Mo., said on Tuesday.
“President Biden’s brinksmanship – not to mention the $10 trillion in new spending he and Washington Democrats passed over the past two years – pushed America’s credit rating off the ledge,” Smith said. — FoxNews
What will this affect?
Bonds are now higher-risk and may require a higher premium to attract lenders. If so, managing the interest payments will squeeze the budgets of governments at federal and local levels even more than they already are.
