DThe United States threatens to downgrade its credit rating. The rating agency Fitch lowered the outlook for American creditworthiness from “stable” to “negative” at the weekend. So far, the United States has the highest rating of “AAA” at Fitch. With the poorer outlook, credit assessors are reacting to the continuing deterioration in public finances and the lack of a credible consolidation program.
Due to President Donald Trump’s tax cuts, budget deficits and government debt have already swelled in recent years. Now these will continue to increase due to the relief measures in the wake of the Corona crisis. Fitch analysts are increasingly concerned that decision-makers in Washington will not consolidate public finances sufficiently after the end of the corona crisis.
The political blockade continues
After the presidential elections in November, they expect the political blockade to continue because neither Republicans nor Democrats are likely to reach a clear majority in the Senate. Fitch expects US government debt to rise to 130 percent of economic output (gross domestic product; GDP) in 2021. Even before the crisis, the United States had the highest public debt in an “AAA” country.