Fitch downgrades U.S. credit rating U.S. experts worry that rising debt burden may dampen U.S. economy
The international rating agency Fitch recently downgraded the long-term foreign currency issuer default rating of the United States from AAA to AA+. According to US media reports, a number of US economic experts said that the US federal government failed to take seriously the growing fiscal deficit and the mountain of debt problems, which may further slow down economic growth.
Shai Akabas, director of economic policy at the Bipartisan Policy Research Center in the United States, said that the growing debt of the US government may eventually push up the country’s borrowing costs and threaten economic growth. More federal tax revenue will be used to pay interest on the debt. Instead of using it to create value for the economy, the federal government may also lose some spending power on social welfare programs and programs that help stimulate the economy, which could slow economic growth in the long run.
Mark Zandi, chief economist of Moody’s Analytics, said that the financial impact of the downgrade of the US credit rating may be long-term. Consumers could face higher borrowing costs for everything from credit cards and mortgages to autos, and investors would have less confidence in the U.S. to repay debt if the U.S. government doesn’t enact policies to address long-term debt.
Jeffrey Smith, a professor at the Business School of Arizona State University, said that in the long run, Fitch’s downgrade of the US credit rating may be just the beginning. The mountain of debt in the US cannot be fully paid through taxes alone, and the risk of US debt default is still high. This will severely damage the US economy.
The Voice of America radio website commented that in recent years, neither party in the United States has taken drastic measures to solve the ballooning government debt in the United States, causing the debt of the US government to account for as much as 113% of the GDP, the highest since the end of World War II. Unprecedented levels, and this ratio continues to rise.
Desmond Rahman, a senior fellow at the American Enterprise Institute, said that Fitch’s announcement to lower the U.S. credit rating is a “warning call” to U.S. policymakers that they need to take the fiscal deficit seriously. Fitch’s downgrade of the U.S. credit rating may have a potential negative impact on the U.S. economy and the global economy. Chronic budgetary imbalances will have to make overseas investors reconsider investing in a government that appears incapable and unwilling to balance its budget.
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2023-08-06 09:39:00
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