And so it finally begins? Emphasis mine, reformatted: ‘U.S. Gets a Debt Warning From Fitch as Stimulus Battle Rages.’ (Bloomberg) One of the world’s major credit-rating companies fired a warning shot regarding the U.S.’s worsening public finances on Friday…
Related: What Questions Should we Put to Politicians Itching to Intervene into the Economy?
…, just as lawmakers in Washington contemplate spending more to combat the economic fallout from the coronavirus pandemic. Fitch Ratings revised its outlook on the country’s credit score to negative from stable, citing a “deterioration in the U.S. public finances and the absence of a credible fiscal consolidation plan.” The country’s ranking remains AAA.
“High fiscal deficits and debt were already on a rising medium-term path even before the onset of the huge economic shock precipitated by the coronavirus,” Fitch said. “They have started to erode the traditional credit strengths of the U.S.”
So much for the Progressives’ idea of Modern Monetary Theory which holds that the US could print as much money as it wants to without injury. We, who actually learned history when our education systems were “AAA” as well, know better.
Ditto those of us who watched other countries in the last few decades try the same stunt. EVERYONE should be looking at this closely as the idea of “Universal Basic Income” (UBI) seemingly gains strength and our current crop of chuckleheads in Congress are looking to send out MORE chunks of “micro-UBI” checks masked as “stimulus” checks.
Once on my hamlet’s BudComm, when our national debt was only $8 Trillion (really, ONLY???), I started warning folks that NOT taking money from the Feds (ALWAYS with “strings attached” – which generally meant more spending at the local level) should be the path to follow. With the above, towns, cities, and States ought to be worried about any attempts to clawback monies already expended in addition to structural dependencies on Fed money to balance their budgets.
Now, we’re at $26 Trillion and the spending is only ramping up. The slowest motion man-made disaster EVAH! And if you think that it wouldn’t hit NH hard, ask Gov. Sununu’s office how much of our budget is funded by the Feds – you’ll immediately head to a bar to drink your financial sorrows away.
I agree with Glen as he finishes his post:
I’m just as worried about the debt as ever, but I’ve come to the sad conclusion that nothing will be done until our hand is forced by something catastrophic. Fair chance that will happen this decade, but who knows? People have been talking debt catastrophe for my entire lifetime and so far nothing. I wish that meant that debt catastrophe will never come, but I have my doubts.
That which is not sustainable, won’t. This will be like an Olympic sprinter crossing the line first but instead of the “winner’s tape” at the end and then they gradually slow down, it’ll be a thick brick wall with an instant stop. And THEN the “fun” begins…
