What No One Realizes About Fitch’s U.S. Credit Downgrade
While Fitch Ratings mined a mother lode of publicity when it recently cut the credit rating of U.S. government obligations, market reactions were largely muted. After all, no one seriously believes that Uncle Sam would default on its bonds the way, say, Argentina routinely does.
But for all the flaws of credit-rating agencies like Fitch, it is in a larger sense correct that if Washington continues on its current course, it will seriously degrade the quality of its debt. This episode of What’s Ahead explains what the threats are and that conventional nostrums, such as tax hikes, are no cure.
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