The warning came from Fitch Ratings, one of the “Big Three” credit rating agencies. David Badash of The New Civil Rights Movement explains:
In a “rating action commentary” published just minutes after markets closed Fitch Ratings said it “has affirmed the United States’ Long-Term Foreign Currency Issuer Default Rating (IDR) at ‘AAA,’” but warned: “The Rating Outlook is Negative.”
In a word, Trump.
“The failure of the former president to concede the election and the events surrounding the certification of the results of the presidential election in Congress in January, have no recent parallels in other very highly rated sovereigns,” Fitch declared, explaining its negative outlook warning.
Read the full report here. It noted that while Fitch’s fiscal and debt projections for the United States have improved since its last review in July 2020, “a deterioration in governance” could drag the rating down.
For those who don’t know, a country with a lower credit rating has to pay more interest on debt that it issues. Granted, there isn’t that much difference on paper between a AAA rating and a AA rating. According to Fitch’s definitions, AAA indicates “exceptionally strong capacity” to pay back debt, while AA indicates “very strong capacity.” Still, the prospect of having to pay more interest, even a little more, is not a good look. And that would be especially true if we ended up having to pay more interest because of a guy whose slogan is “Make America Great Again,” and who declared time and again that he alone could ensure we were great again.
I’ve taken to likening Trump to a college coach who wins a ton of games and championships while playing fast and loose with NCAA rules or academic standards. When the violations come to light, either the NCAA or school officials respond with sanctions that devastate the program for several years to come. Or Whitey Bulger—even if he did help the FBI take down the Boston Mafia, was it really worth covering up for a brutal murderer, and eroding Bostonians’ trust? This is no different. Were three Supreme Court appointments and a massive tax cut package really worth the prospect of socking this country with more interest on our debt?