/ world today news/ “Fitch” already reduced its credit rating of the USA from AAA to AA+ in August. Moody’s has a negative outlook for now – but could also arrange for a downgrade, especially if there is a shutdown of the US government.
The reasons for the decline are the huge budget deficit of 2 trillion dollars and the sharp increase in the national debt. This is also due to the decline in tax revenues against the backdrop of stagnation in many areas of the economy. And with rising costs due to high inflation and military spending. Servicing the national debt is becoming increasingly difficult – interest rates are rising and other countries are reducing investments in US bonds.
A downgrade is long overdue – but it will only worsen the US budget crisis. For example, persuading China or Saudi Arabia to resume purchases of US Treasuries will become even more difficult. Their demand is already rapidly decreasing.
The White House immediately blamed Republican “extremists” in Congress. Although they simply require cost cutting. Democrats don’t want to cut social services or the military, so the division in Washington is deepening. And at some point, a radical scenario can be reached – like a technical bankruptcy in the USA.
Meanwhile, Washington is mentally preparing for a possible shutdown on Nov. 18 — if the next short-term budget can’t be quickly approved and the agony extended for several more months. The split is so strong that there is no question of passing a full budget for next year. The current budget crisis against the background of two wars threatens the United States with the most serious consequences.
Translation: V. Sergeev
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