The credit score for the United States of America just got whacked. We all have a credit score, which plays a big role in securing loans to buy a house or car. A great credit score means favorable terms for a house loan, but a low credit score often means a higher interest rate and larger monthly payments.
Well, for only the second time in American history the credit score for our nation has been reduced. It’s technically called a “credit downgrade,” and was announced by the nationally known Fitch Ratings Agency. The downgrade takes America’s credit rating from AAA to AA+.
Numerous states, like Florida, and numerous businesses like Microsoft, now have a better credit rating than the United States of America. That’s just shameful, unacceptable and dangerous. Fitch reported that the “downgrade of the United States reflects the expected fiscal deterioration over the next three years” and additionally that “there has been a steady deterioration of governance over the last 20 years.”
Also, because of very high interest rates, Fitch is projecting a recession at the end of 2023 and into the first quarter of 2024. When the economy slows, revenue drops just when interest rate payments are rising and eating up more of the budget. The financial pressure builds, just like an overheated engine that can’t handle the intense heat anymore, spits out blistering steam and ultimately breaks.
To improve the nation’s credit rating Fitch recommends “a fiscal adjustment to address rising mandatory spending or to fund such spending with additional revenues.” That’s fancy talk for reduce spending or raise taxes. A banker talking to a customer about improving his or her credit score would simply say cut back on spending and reduce debt, but for liberal big spenders in D.C., common sense is in short supply.