(TheRedAlertNews.com) – In a new blow to Joe Biden’s administration, which, unfortunately, will also hurt the nation, one of the “big three” credit rating agencies has downgraded the debt rating of the United States.
National Review reports that Fitch Ratings reduced America’s long-term foreign-currency-issuer default rating from the highest AAA to AA+.
The credit rating downgrade occurred earlier this year when Biden and Republican House Speaker Kevin McCarthy negotiated a last-minute deal to up the debt ceiling and avoid a federal government default. The deal was criticized on the right for failing to exact more fiscal responsibility from the Democrats.
The last time America’s credit rating was downgraded was due to similar last-minute debt ceiling talks under Barack Obama a decade ago.
In seeming indirect criticism of the Biden administration, Fitch justified its downgrade with “a steady deterioration” in governance standards, ongoing and likely future fiscal instability, and growing debts and deficits.
However, radical left news network CNN tried to turn the downgrade on the right and the American people by ludicrously singing its known tune that sources had told it the worsened credit score was also due to the “January 6 insurrection,” an event that occurred over 2.5 years ago.
Fitch’s statement mentioned nothing of the sort but dwelled overwhelmingly on the last-minute borrowing limit negotiations.
“The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management,” the agency said.
“In addition, the government lacks a medium-term fiscal framework, unlike most peers, and has a complex budgeting process. These factors, along with several economic shocks as well as tax cuts and new spending initiatives, have contributed to successive debt increases over the last decade,” Fitch elaborated.
It also stressed other factors reducing the US government’s reliability to honor its obligations, such as the Fed’s interest-rate spikes for fighting inflation, which were tightening monetary conditions.
The credit rating agency noted the central bank’s shedding of mortgage-backed securities and US Treasuries, a “mild recession” expected in the last quarter of 2023, and the effect of Medicare and Social Security spending.
Biden’s press secretary Karine Jean-Pierre slammed Fitch’s downgrade, saying the administration “strongly disagrees” with the agency’s analysis.