Fitch lowers US debt rating

It’s fricking useless.

"Fitch Ratings downgraded the United States’ long-term foreign currency issuer default rating to AA+ from AAA on Tuesday, pointing to “expected fiscal deterioration over the next three years,” an erosion of governance and a growing general debt burden.

“The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management,” said Fitch."

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Which is out of control with these interest rates. We are at the point where the Fed will have to lower rates, just can’t service the debt

Imagine having the power to change a rating to influence the entire US market

I wonder how many Fitch insiders made out big from this

quote:

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Would like to know why. Is there another debt ceiling fight coming up?

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No, they just fought that fight and signed a very shitty deal. That, at least to me, is part of the problem. Part of that may well be the CBO's recent statement that they believe debt servicing will eclipse Defense and Medicaid spending (not combined though) within the next 10 years.

Another part is likely the emergence of this amazing ability for OMB to now magically "find" hundreds of millions and billions of dollars to send to Ukraine yet not use it to pay down one fricking cent on the debt.

The point I've made on this for many years is that "no one goes to DC to serve a single term". What I mean by that is that Congressional elections run on members of Congress spending money on their myriad of programs that people derive benefit from. Asking them to cut spending is (to them) like asking them to "purposely lose your next election and, in the process, possibly royally frick the rest of your political career".

This means the most Congress will likely be willing to "cut spending" in any sort of long-term plan will be to hold levels to some absurdly high level of deficit spending (see the recent agreement that locks spending in on one of the highest deficit-spending years on record).

This means more and more debt which means more and more servicing. As we all know, just servicing debt while accumulating ever more debt (ie: not even paying it down to maintain leverage ratio) has only one end and it's not "prosperity".

We're likely already there but I think the true "fiscal cliff" for this country will be signaled by debt servicing being the single largest category of spending (which will likely happen within 10-15 years after it outpaces Defense and/or Medicaid).