Frankly, Moody’s was negligent by not lowering it sooner. Until our politicians control spending and get our debt under control, we are a credit risk. Pretty soon our Congress is going to be getting payday loans to keep the spending going.
The US was stripped of its last top credit rating by Moody’s Ratings, reflecting deepening concern that ballooning debt and deficits will damage America’s standing as the preeminent destination for global capital and increase the government’s borrowing costs.
Moody’s lowered the US credit score to Aa1 from Aaa on Friday, joining Fitch Ratings and S&P Global Ratings in grading the world’s biggest economy below the top, triple-A position. The one-notch cut comes more than a year after Moody’s changed its outlook on the US rating to negative. The credit assessor now has a stable outlook.
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The shift comes at a time when the federal budget deficit is running near $2 trillion a year, or more than 6% of gross domestic product. A weaker US economy in the wake of a global tariff war is set to increase the deficit as government spending typically rises when activity slows.
That outlook comes as the overall debt level for the US has already surpassed the size of the economy in the wake of profligate borrowing since Covid. Higher interest rates over the past several years have also pushed up the cost to service the government’s debt.
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The US government is on track to surpass record debt levels set after World War II in just four years, reaching 107% of gross domestic product by 2029, the Congressional Budget Office warned in January.
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