You’ve heard plenty from presidential candidates Donald Trump and Kamala Harris. And while the candidates might have a plan to significantly cut spending, they have talked little to none about it and not indicated it would be enough to put the U.S. fiscal house in order.
Aside from either sides’ unwillingness to substantially cut spending, international credit agencies cite the U.S. political dysfunction as a concern.
In a major warning sign to the U.S. that was largely ignored, Fitch Ratings, one of the top three international credit rating agencies, downgraded the United States government’s credit rating last year from the highest level of AAA down one tier to AA+.
From The Center Square:
“In Fitch’s view, there has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025,” Fitch said in August 2023. “The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management. In addition, the government lacks a medium-term fiscal framework, unlike most peers, and has a complex budgeting process.”
The fiscal data amounts to the federal government borrowing $5 billion per day so far this year.
“Our elected officials have slept through so many alarm bells that we’ve racked up over $1.5 trillion in deficits this year, and the interest on our debt alone is more than we spend on national defense,” MacGuineas said.