One of the “Big Three” credit reporting agencies that rate government bonds and securities on Tuesday issued a warning that the U.S. could lose its coveted AAA status over issues currently hanging over American democracy.
In a “rating action commentary” published just minutes after markets closed Fitch Ratings said it “has affirmed the United States’ Long-Term Foreign Currency Issuer Default Rating (IDR) at ‘AAA,'” but warned: “The Rating Outlook is Negative.”
Why? Continue reading.
One of the ways that Republicans demonstrate that they are the “post-truth” party is that, when Democrats are in office, they prioritize federal deficit reduction, but when they’re in charge, the deficit soars. Right on cue, the Wall Street Journal reported back in October that the federal deficit was about to reach $1 trillion.
A strong economy typically leads to narrower deficits, as rising household income and corporate profits help boost tax collections, while spending on safety-net programs such as unemployment insurance tends to decline.
The U.S. economy has been growing for 10 years as of July, the longest economic expansion on record. Yet annual U.S. deficits are on track to exceed $1 trillion starting this year, due in part to the 2017 tax law, which constrained federal revenue collection last year, and a 2018 budget deal that busted spending caps enacted in 2011.
When even Rupert Murdoch’s paper credits the Republican tax cuts as a contributor, you can take that one to the bank. Steve Benen put together a helpful chart to demonstrate what has happened to the deficit over time. Continue reading
