Moody’s quoted the rise in debt, saying we have failed to repeatedly end the massive fiscal deficit and interest trends of year.
Moody’s rating stripped the US government of its highest credit rating, citing future governments that they were unable to stop the debt tide.
On Friday, Moody reduced his rating from the gold standard AAA to AA1. “All US administrations and Congress have not agreed to measures to reverse the trend in large annual fiscal deficits and interest growth,” he said, turning the US outlook from “negative” to “stable.”
However, the US added that “holds extraordinary credit strength, including the size of the economy, resilience, dynamism and the role of the US dollar as a global reserve currency.”
Moody’s is the last of three major rating agencies that will lower the federal government’s credit rating. Standard & Poor’s federal debt downgraded in 2011, and Fitch valuation continued in 2023.
In a statement, Moody’s said: [the US economy] By 2035, it was up from 6.4% in 2024, driven primarily by increased interest payments on debt, increased eligibility expenditures and relatively low revenue generation. ”
Moody’s said President Donald Trump’s 2017 tax cuts, a Republican-controlled Congressional priority, would add $4 trillion to the federal primary deficit over the next decade.
The White House adopted an offensive tone for the Moody’s after the rating agency downgraded its US credit rating.
White House Communications Director Stephen Chan responded to the downgrade via social media posts, bringing Moody economist Mark Zandy independently to criticize. He called Zandi a political opponent of Trump.
“No one takes his ‘analysis’ seriously. He proves wrong over and over again,” Chan said.
The grid-locked political system was unable to tackle the huge deficit accumulated by the US. Republicans have refused to raise taxes, and Democrats are reluctant to cut spending.
On Friday, House Republicans failed to drive a major package of tax credits and spending cuts through the Budget Committee. A small group of right-right Republican lawmakers advocating a sudden cut in the Green Energy Tax Credit for Medicaid and President Joe Biden, joined all Democrats who oppose it, a rare political setback against the Republican president.
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