{"id":2044432,"date":"2023-09-25T20:12:02","date_gmt":"2023-09-26T00:12:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/top-credit-rating-agency-warns-government-shutdown-would-make-u-s-look-weak\/"},"modified":"2023-09-25T20:17:17","modified_gmt":"2023-09-26T00:17:17","slug":"top-credit-rating-agency-warns-government-shutdown-would-make-u-s-look-weak","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/top-credit-rating-agency-warns-government-shutdown-would-make-u-s-look-weak\/","title":{"rendered":"Credit rating agency warns US government shutdown would weaken country&#8217;s image."},"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\">22<\/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%2Ftop-credit-rating-agency-warns-government-shutdown-would-make-u-s-look-weak%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=2044432&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--><h2>The Only Member of the &#8220;Big Three&#8221; Agencies Warns of Government \u2062Shutdown Impact on U.S. Credit Rating<\/h2>\n<p>The \u200cUnited States, known for its top-rated credit status, is at risk of appearing weak compared to\u200c other nations if another government\u2063 shutdown occurs, according to Moody&#8217;s Investors Service. While the country&#8217;s credit rating has\u200b not been downgraded by Moody&#8217;s, the agency issued a &#8220;credit negative&#8221; warning as\u200b Congress races to \u200dsecure\u200c funding for various federal government branches before \u2063the start of the new fiscal year.<\/p>\n<blockquote>\n<h3>Highlighting Weakness in Institutional and Governance \u2063Strength<\/h3>\n<p>Moody&#8217;s emphasized that although a short-lived shutdown \u2064would not disrupt the economy or impact government\u2062 debt service payments, it would underscore the weakness \u200dof \u200bthe United States&#8217; institutional and \u2064governance\u2064 strength\u2063 compared to \u2062other \u200dAAA-rated sovereigns. The agency pointed out the significant constraints imposed \u200cby intensifying political polarization on fiscal policymaking, especially during a time of declining fiscal strength due to widening deficits and deteriorating debt affordability.<\/p>\n<\/blockquote>\n<p>Over a decade ago, the other two major credit\u2064 agencies began downgrading the United States from its\u2064 top-rated \u200c&#8221;AAA&#8221;\u200c position. This downgrade, which <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/top-credit-rating-agency-warns-government-shutdown-would-make-u-s-look-weak\/\" title=\"Credit rating agency warns US government shutdown would weaken country's image.\">occurred amidst rising government budget numbers<\/a> and a doubling \u200dof debt since 2011, could result in increased\u2063 borrowing costs, <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/australia-expects-unemployment-rate-to-rise-as-global-economy-slows\/\" title=\"Australia anticipates higher unemployment rates due to the global economic slowdown.\">higher interest \u200drates<\/a>, and harm to the economy, according to analysts.<\/p>\n<p>In 2011, S&#038;P lowered the U.S. <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/top-five-who-are-sen-rick-scotts-possible-democratic-challengers\/\" title=\"Who might challenge Sen. Rick Scott from the Democratic party? Here are the top five contenders.\">long-term rating<\/a> from &#8220;AAA&#8221; to &#8220;AA+&#8221; due\u2062 to political brinkmanship and the mounting debt burden. This decision came shortly after then-President\u2063 Barack Obama signed legislation to \u200craise the debt \u2063ceiling, \u200bpreventing a potential default on financial obligations.<\/p>\n<p>Just two\u200b months \u2064ago, Fitch Ratings also downgraded the country&#8217;s Long-Term Foreign-Currency Issuer Default \u2063Rating\u2064 from &#8220;AAA&#8221; to\u2063 &#8220;AA+&#8221; following a narrow escape from a debt default over the summer. This downgrade occurred ahead of the ongoing spending showdown \u200cin a politically-divided Congress.<\/p>\n<blockquote>\n<h3>Potential Impact on Economy and GDP Forecasts<\/h3>\n<p>While Moody&#8217;s did not announce a downgrade on Monday, the agency \u200bwarned of a more significant impact on\u2064 the economy and GDP forecasts if \u2063a government shutdown becomes prolonged and negatively affects national business and consumer confidence or triggers adverse reactions\u200b in financial markets.<\/p>\n<\/blockquote>\n<p>Moody&#8217;s \u200canalyst William \u200cFoster expressed concerns about \u2063the credit\u2062 profile&#8217;s increasingly negative \u2064impact if there \u2062is no effective fiscal policy response to offset the \u200cpressures on U.S. government debt affordability caused by higher interest rates. He emphasized that failure to address these\u200b pressures could lead to a negative outlook and potentially a downgrade\u200c in the future.<\/p>\n<p> <\/p>\n<h2> What are the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/young-americans-must-lead-the-way-in-opposing-additional-covid-shutdowns\/\" title=\"Young Americans Must Lead The Way In Opposing Additional COVID Shutdowns\">long-term consequences<\/a> for the U.S. credit rating when a government shutdown disrupts economic activity?<\/h2>\n<p><span>  Ed out that repeated government shutdowns over\u200c the years have eroded institutional strength and raised\u200c doubts about \u200bthe ability of \u2063the U.S. government to function effectively.<\/p>\n<p>This warning from Moody&#8217;s is significant because it comes from the only member of the &#8220;big three&#8221;\u2062 credit \u200brating agencies that has not downgraded \u2062the U.S.\u200d credit rating in the past. Standard &#038; Poor&#8217;s and Fitch Ratings both downgraded the U.S. from its long-held \u200cAAA rating in 2011 during the debt ceiling crisis. Moody&#8217;s,\u200d on the other hand,\u2064 has maintained a stable outlook on the U.S. credit rating.<\/p>\n<p>The impact\u2064 of a government shutdown\u2063 on the U.S. credit rating can be traced back to the negative effects it has on \u2062the economy. A shutdown disrupts various government services, leading to a slowdown in economic activity. It also hampers\u2064 the confidence of \u200dinvestors and creditors in\u2062 the stability and reliability of the U.S. government, which can \u200bhave long-term consequences for the country&#8217;s creditworthiness.<\/p>\n<p>Moody&#8217;s\u2063 warning serves as a reminder to \u2063Congress of the potential repercussions of another government shutdown. It urges policymakers to find a timely resolution \u2062to funding issues and avoid the risk of a disrupted \u2063economy and \u2062tarnished credit rating. The agency also notes that the impact on\u200c the \u2062credit\u200d rating is not immediate \u2062but can materialize over time as doubts\u2064 grow about the government&#8217;s ability to manage its finances.<\/p>\n<p>It is crucial for the \u2062United States to \u2063maintain a high credit rating \u2064as it enables the \u2064government to borrow at lower interest rates and ensures the confidence of\u200c global investors \u200bin the stability of the U.S.\u200b financial system. A lower \u200dcredit rating would\u200d result\u200b in \u2062higher borrowing costs for the government, leading to\u200b increased\u200c public debt and potentially hampering economic growth in the long run.<\/p>\n<p>Furthermore, a lower credit rating can\u200d also affect the United States&#8217; standing in the world economy. As one of the\u2063 largest economies, the U.S. plays a crucial role in global markets and serves as a benchmark for other countries. A downgrade in the\u2062 U.S. credit rating would \u2063not\u2062 only impact the country&#8217;s credibility but also have broader implications\u2063 for the global financial\u2062 landscape.<\/p>\n<p>In conclusion, Moody&#8217;s warning\u2064 about the impact of a government \u200cshutdown on the U.S. credit rating highlights the importance of reaching a timely resolution to funding\u200b issues \u2062and avoiding disruptions to the economy. Maintaining a top-notch credit rating is crucial for the United States&#8217;\u200b financial stability and\u200d global standing. As Congress races to secure funding, it\u200c must keep \u200din mind the potential consequences of \u2062a shutdown on the\u200c country&#8217;s creditworthiness.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Moody&#8217;s, the sole agency yet to downgrade the US credit rating, cautioned that another government shutdown would weaken the country&#8217;s image compared to other highly-rated nations. As Congress races to find a solution, Moody&#8217;s issued a &#8220;credit negative&#8221; warning on Monday.<\/p>\n","protected":false},"author":1588,"featured_media":2044433,"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":[541],"tags":[],"class_list":["post-2044432","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-daily-wire"],"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\/2044432","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\/1588"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2044432"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2044432\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2044433"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2044432"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2044432"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2044432"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}