• 288 days Will The ECB Continue To Hike Rates?
  • 288 days Forbes: Aramco Remains Largest Company In The Middle East
  • 290 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 690 days Could Crypto Overtake Traditional Investment?
  • 694 days Americans Still Quitting Jobs At Record Pace
  • 696 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 699 days Is The Dollar Too Strong?
  • 700 days Big Tech Disappoints Investors on Earnings Calls
  • 701 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 702 days China Is Quietly Trying To Distance Itself From Russia
  • 703 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 707 days Crypto Investors Won Big In 2021
  • 707 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 708 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 710 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 710 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 714 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 714 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 715 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 717 days Are NFTs About To Take Over Gaming?
Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

How Millennials Are Reshaping Real Estate

How Millennials Are Reshaping Real Estate

The real estate market is…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

Ian Campbell

Ian Campbell

Through his www.BusinessTransitionSimplified.com website and his Business Transition & Valuation Review newsletter Ian R. Campbell shares his perspectives on business transition, business valuation and world…

Contact Author

  1. Home
  2. Markets
  3. Other

United States: Debt Ceiling, Credit Rating

A report yesterday said that both Fitch and Moody's have a negative view on the U.S. economic outlook, and that Fitch has warned that if the U.S. Federal Government fails to raise the debt ceiling in a 'timely manner' (whatever that means) it will prompt a formal review of Fitch's current AAA U.S. credit rating.

You will recall that Standard & Poor's made big headlines in August 2011 when it then dropped its U.S. credit rating from AAA in the aftermath of the last U.S. debt ceiling negotiations.

I am not reading too much into any of this. Expect a lot of media focus on the upcoming U.S. debt ceiling negotiations. I say 'expect more of the same' by way of partisan political position, and dysfunctional negotiations - but in the end expect:

  • the U.S. debt ceiling to be raised;

  • the U.S. to continue to run deficits; and,

  • further debt ceiling debates going forward.

You might also want to read The Debt Ceiling Is Pointless and Dangerous and Practically All Economists Agree, an article that says practically all U.S. economists agree that the existence of the U.S. debt ceiling results in unneeded economic uncertainty, and 'can potentially lead to worse fiscal outcomes'.

I disagree that the U.S. debt ceiling concept is wrong-headed. U.S. Federal spending is out of control when measured against its current GDP and near-term economic growth prospects. The debt ceiling is the only real 'check and balance' barrier to U.S. Federal Government spending I know of in circumstances of a polarized U.S. Federal government.

 

Back to homepage

Leave a comment

Leave a comment