Fitch downgrades US credit rating, citing mounting debt and political divisions

Embarrassing, but fully deserved. Thanks, Kevin.

This is the best summary I could come up with:

The Government Accountability Office, in a 2012 report, estimated that the 2011 budget standoff raised Treasury’s borrowing costs by .3 billion that year.

Global investors often flock to U.S. Treasury securities during periods of economic turmoil, lowering the interest rate paid by the U.S. government.

It said U.S. governance has declined relative to other highly rated countries and it noted “repeated debt limit standoffs and last-minute resolutions.”

Fitch produced a report last year that showed government stability declined from 2018 to 2021, but increased since Biden assumed the presidency, said the person, who was granted anonymity to disclose private conversations.

Economists at the Federal Reserve made a similar forecast this spring but then reversed it in July and said growth would slow but a recession would likely be avoided.