{"id":1990518,"date":"2023-08-04T03:23:01","date_gmt":"2023-08-04T07:23:01","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/americas-debt-rating-downgrade-shows-washington-is-still-building-back-bankrupt\/"},"modified":"2023-08-04T03:26:23","modified_gmt":"2023-08-04T07:26:23","slug":"americas-debt-rating-downgrade-shows-washington-is-still-building-back-bankrupt","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/americas-debt-rating-downgrade-shows-washington-is-still-building-back-bankrupt\/","title":{"rendered":"US Debt Rating Downgrade Reveals Washington&#8217;s Ongoing Financial Struggles"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Famericas-debt-rating-downgrade-shows-washington-is-still-building-back-bankrupt%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1990518&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div class=\"article-content\">\n<p>While the press and the American people focused on the Justice Department\u2019s latest indictment of President Trump,\u200d another no less significant\u200b event was taking place on Tuesday afternoon. Specifically, Fitch Ratings announced it \u2062had officially downgraded the United States\u2019 credit rating.<\/p>\n<p>The action \u200bby \u2063Fitch comes a dozen \u2062years after Standard and Poor\u2019s downgraded the federal government\u2019s debt rating, meaning that two of the three <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/pointing-to-national-debt-ratings-agency-issues-negative-outlook-for-us-aaa-creditworthiness\/\" title=\"Pointing To National Debt, Ratings Agency Issues \u2018Negative Outlook\u2019 For US \u2018AAA\u2019 Creditworthiness\">credit rating agencies<\/a> have stripped Washington \u200bof \u2062its vaunted \u201cAAA\u201d status. <\/p>\n<div class=\"fdrlst__b89e9-paragraph-2-long d-flex justify-content-center\" style=\"margin-left: auto; margin-right: auto; text-align: center; \" id=\"fdrlst__b89e9-1444872805\">\n<div id=\"div-gpt-ad-1379703300879-0\" class=\"mb-30\"><\/div>\n<\/div>\n<div class=\"fdrlst__b89e9-b6d7bf7d1e0977f6506f997f1df75f4e fdrlst__b89e9-paragraph-2\" id=\"fdrlst__b89e9-b6d7bf7d1e0977f6506f997f1df75f4e\"><\/div>\n<p>It is but \u2064the latest indication of how presidents \u200band politicians\u200c from both parties have ignored the serious fiscal problems within\u2063 our nation \u2014 and yet another warning of the reckoning we \u200cwill ultimately\u200d face as a people.<\/p>\n<h2 class=\"wp-block-heading\"><strong>Storm Clouds Ahead<\/strong><\/h2>\n<p>Fitch\u2019s <a href=\"https:\/\/www.fitchratings.com\/research\/sovereigns\/fitch-downgrades-united-states-long-term-ratings-to-aa-from-aaa-outlook-stable-01-08-2023\" target=\"_blank\" rel=\"noreferrer noopener\">statement<\/a> said that \u201cthe rating downgrade \u2026 reflects the expected fiscal \u200cdeterioration over the next three years, a high and <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fitch-downgrades-us-credit-rating-biden-officials-strongly-disagree\/\" title=\"Fitch lowers US credit rating; Biden officials disagree.\">growing general government debt burden<\/a>, and the erosion of governance \u2026\u200c over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions.\u201d<\/p>\n<p>The objections to \u201cstandoffs and last-minute resolutions\u201d seems off-base,\u2063 seeing \u200bas how\u2064 Congress only pretends to care about fiscal reform in the face of an imminent deadline. None \u2062other than Joe Biden himself <a href=\"https:\/\/twitter.com\/chrisjacobsHC\/status\/1623342515565764609\" target=\"_blank\" rel=\"noreferrer noopener\">admitted<\/a> back \u2062in 1984 that Congress \u201cshould be focused on taking on the tough measures\u201d to lower spending \u201cwhen you have to raise the debt ceiling again.\u201d<\/p>\n<p>But when it comes to the deterioration of the nation\u2019s fiscal position, Fitch is bang on the money in highlighting the depth \u2062of our problems. With regards to general government deficits \u2014 which include those incurred by state and local governments \u2014\u2063 Fitch estimates they will rise from 3.7 percent of GDP last year to 6.3 percent this year, 6.6 percent next year, \u2062and 6.9 percent of \u200bGDP in 2025.<\/p>\n<div class=\"fdrlst__b89e9-0a831e2163fcc897f1727ecff8eea3d8 fdrlst__b89e9-paragraph-6\" id=\"fdrlst__b89e9-0a831e2163fcc897f1727ecff8eea3d8\"><\/div>\n<p>This significant increase in deficits comes at a time when (thus far at least) the economy continues to grow at \u200ca moderate pace, and unemployment remains at <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/in-2021-americas-population-grew-at-slowest-rate-since-founding-of-the-nation\/\" title=\"In 2021, America\u2019s Population Grew At Slowest Rate Since Founding Of The Nation\">historically low levels<\/a>. If governments are incurring\u200d this amount of debt in comparatively good economic times, what \u2064will happen\u200c if the nation faces another severe recession?<\/p>\n<h2 class=\"wp-block-heading\"><strong>Rising Debt<\/strong><\/h2>\n<p>The accumulated deficits of the past several decades have led to \u2063sizable growth\u200b in the national debt. Consider\u2062 that when S&#038;P downgraded the federal credit rating in 2011, the federal debt <a href=\"https:\/\/archive.is\/TukM5\" target=\"_blank\" rel=\"noreferrer noopener\">stood<\/a> at roughly 65\u2063 percent\u200d of \u2063GDP. Now, 12 years later,\u2063 it has risen \u200cto nearly 100 percent, and estimates suggest\u2063 it will\u2064 continue to rise\u2063 sharply higher.<\/p>\n<p>Fitch noted that with respect to general\u2064 government debt (which again includes that incurred by state and local governments), the United States is projected to have a debt ratio over three \u2064times higher than the \u200bmedian country\u2063 with an \u201cAAA\u201d \u200drating, and over 2.5 times the median country with \u201cAA\u201d credit by 2025. <\/p>\n<p>In many respects, therefore, the question isn\u2019t why Fitch selected this time to\u200d downgrade our \u200bdebt, but why it took so long to do so.<\/p>\n<div class=\"fdrlst__b89e9-94702af0eec22aaf752aedf1d3eab14d fdrlst__b89e9-paragraph-10\" id=\"fdrlst__b89e9-94702af0eec22aaf752aedf1d3eab14d\"><\/div>\n<h2 class=\"wp-block-heading\"><strong>Tax\u200b and Spend<\/strong><\/h2>\n<p>In a <a href=\"https:\/\/home.treasury.gov\/news\/press-releases\/jy1665\" target=\"_blank\" rel=\"noreferrer noopener\">statement<\/a> disagreeing with Fitch\u2019s decision, \u200dTreasury Secretary Janet Yellen among other things claimed that governance \u2063had improved under President Biden, due in part to the passage of legislation to \u201cinvest in infrastructure, and make other investments\u2062 in America\u2019s competitiveness.\u201d<\/p>\n<p>Only in an administration led by someone who once <a href=\"https:\/\/www.youtube.com\/watch?v=LHFEcyUNBjg\" target=\"_blank\" rel=\"noreferrer noopener\">famously claimed<\/a> that \u201cwe\u2064 gotta go spend\u2063 money to keep from going bankrupt\u201d could an official\u200d claim \u2064with a straight face that\u2063 making\u2063 \u201cinvestments\u201d will somehow reduce our growing deficits in debt. <\/p>\n<p>In fact, a Goldman Sachs report issued in March <a href=\"https:\/\/archive.is\/NGghN\" target=\"_blank\" rel=\"noreferrer noopener\">concluded<\/a> \u200c that \u200dthe \u2064<a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/americas-debt-rating-downgrade-shows-washington-is-still-building-back-bankrupt\/\" title=\"US Debt Rating Downgrade Reveals Washington's Ongoing Financial Struggles\">green \u200cenergy subsidies included<\/a> in the\u200d Inflation \u200c(Reduction) Act will cost $1.2 trillion \u2014 more than three times the original Congressional Budget\u200c Office cost.<\/p>\n<p>Of course, Yellen and Biden have company in their spendthrift ways. When drafting bills this summer, even House Republicans, who claim they want to eliminate the\u200b Covid-era binge still present in Congress\u2019s <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/elizabeth-warrens-controversial-financial-agency-unconstitutional-court-rules\/\" title=\"Elizabeth Warren\u2019s Controversial Financial Agency Unconstitutional, Court Rules\">annual spending bills<\/a>, couldn\u2019t help but include <a href=\"https:\/\/thefederalist.com\/2023\/08\/01\/if-house-republicans-really-cared-about-spending-theyd-resist-pork-barrel-earmarks\/\" target=\"_blank\" rel=\"noreferrer noopener\">thousands of earmarks<\/a> \u2014\u200b er, I mean, \u201ccommunity \u200dproject funding\u201d \u2014 to bring\u200b the bacon home to their districts.<\/p>\n<p>In Ernest Hemingway\u2019s <em>The Sun Also Rises<\/em>, the character Mike Campbell, \u2064when asked how he\u200d went bankrupt, responded, \u201cTwo ways. Gradually and then suddenly.\u201d\u2062 Hemingway\u2019s quote provides \u2064an apt metaphor \u2014 and warning \u2014 to Washington politicians who\u200d keep whistling \u200cpast our fiscal graveyard. <\/p>\n<p>The first phase went on for decades. The latter could well be arriving far sooner than anyone thinks.<\/p>\n<div class=\"fdrlst__b89e9-73b74178dbe2d84ed8218a4822d2c0e9 fdrlst__b89e9-after-post-content\" id=\"fdrlst__b89e9-73b74178dbe2d84ed8218a4822d2c0e9\"><\/div>\n<hr class=\"wp-block-separator\">    \t\t\t\t\t   \t\t\t\t\t\t\t\t\t<\/div>\n","protected":false},"excerpt":{"rendered":"<p>While attention was on President Trump&#8217;s indictment, Fitch Ratings made a significant announcement on Tuesday. They officially downgraded the United States&#8217; credit rating, following Standard and Poor&#8217;s downgrade twelve years ago. This event holds equal importance, yet received less attention from the press and American people.<\/p>\n","protected":false},"author":521,"featured_media":1990519,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[546],"tags":[],"class_list":["post-1990518","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-federalist"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1990518","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/521"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1990518"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1990518\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1990519"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1990518"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1990518"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1990518"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}