Standard & Poors: Shutdown And Debt Ceiling Debate Prove U.S. Not Worthy Of AAA Credit Rating
With the U.S. government on the verge of a shutdown, credit rating agency Standard & Poor’s made it clear this level of brinksmanship in Washington is precisely why the U.S. isn’t triple-A rated anymore. While S&P’s ratings services team indicated they don’t expect to downgrade the U.S.’ sovereign credit rating this time around, they warned that failing to reach an agreement by mid-October would most probably lead to the Treasury missing debt payments, and therefore the first-ever U.S. debt default.
“The current impasse over the continuing resolution and the debt ceiling creates an atmosphere of uncertainty that could affect confidence, investment, and hiring in the U.S.,” explained S&P’s research team, indicating it expects a short-lived shutdown that won’t result in a new downgrade. “This sort of political brinkmanship is the dominant reason the rating is no longer ‘AAA,’” they added.