Monday, June 23
Moody’s finally arrived at the party as last month it became the last of the three major credit ratings to downgrade the elite status of U.S. debt (from Aaa to Aa1).
The ratings agency cited the federal government’s growing budget deficit and rising interest payments on its debt as reasons. Moody’s is now aligned with S&P Global Ratings and Fitch Ratings, which downgraded U.S. debt in 2011 and 2023, respectively.
In 2011, S&P cut the U.S. rating four days after Congress raised the debt ceiling, citing America’s governance and policymaking becoming less stable, less effective, and less predictable.
Fitch’s 2023 downgrade is still relatively fresh. Again, the debt limit was cited as Congress dragged its feet on ultimately greenlighting more debt to pay the nation’s massive bills.
Now Moody’s is the last to acknowledge the government’s awful debt situation.
First, there’s the national debt of $36.9 trillion and climbing. That’s $1.66 trillion higher than a year ago, and $11.15 trillion higher than five years ago.
With interest, the debt has increased by an average of $4.54 billion per day over the past year. That’s $3.15 million per minute, or $52,493 per second. Meanwhile, the U.S. budget deficit for the last fiscal year was $1.8 trillion.
Our federal government is drowning in liabilities.
It’s easy to forget the scale of this debt. Just the hundredths place decimal in $4.54 billion is $40 million. And in $1.66 trillion, it’s $60 billion.
We are paying more interest on the debt than we spend on national defense. And the funding and spending bills being talked about in Congress as of this writing are promising essentially more of the same without reducing the size of the government.