The Triple A Rating of the United States is Permanently Downgraded.
From the Rubble of Trump's Reign, America's Triple A Rating Bit the Dust
In a harsh blow to the nation's reputation, Moody's slashed the United States' credit rating. The downgrade, announced on May 16, 2025, left many scratching their heads, reminiscing about the good ol' days of triple A glory. S&P took a similar course in 2011, post the 2008 financial crisis, followed by Fitch in 2023.
"Successive American administrations and Congress have been as frisky as a pair of alley cats when it comes to agreeing on measures to put a halt to the rampant annual budget deficits and inflating interest charges," Moody's stated in an acidic report. "We don't have an ounce of faith that the budget plans currently under the spotlight will yield substantial, multi-year reductions in mandatory spending and deficits," it added.
This disappointing decision deals a double whammy. First, it's a bitter pill for Elon Musk, whose ambitious plans to reform the Department of Government Effectiveness (DOGE) failed to make a splashy impact on federal spending. As per Jason Furman, an economist at Harvard, Musk has merely stirred up microeconomic turmoil without creating a ripple in the overall macroeconomic picture. For Furman, deficits should spike further, as staff cuts within the tax administration weaken the fight against fraud.
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Sifting through the ashes of a bygone era, the downgrade in May 2025 was the result of a stubborn escalation in fiscal metrics over the past decade, including a massive increase in government debt and interest payments, surpassing the levels of similarly rated sovereigns[1][2].
Moody's questioned the viability of the current fiscal proposals, stating that they're not banking on "material, multi-year reductions in mandatory spending and deficits" under these proposals. This vibe of skepticism mirrors apprehensions about the impasse that successive U.S. administrations and Congress have faced in agreeing on measures to tackle the ceaseless surge in annual fiscal deficits and burgeoning interest expenses[1][2].
If you're hunting for information on a downgrade in May 2021, you'll want to dive into the historical records or old news archives from that period. However, based on the current scenario, it's likely that similar fiscal problems might have reared their ugly heads.
For a downgrade in May 2021, there isn't any specific dope available in the search results. If such a downgrade occurred, it would probably have been due to concerns about swelling debt levels and fiscal deficits, a recurring theme in U.S. fiscal policy discussions.
Key Points for May 2025 Downgrade- Reason for Downgrade: Explosive increase in government debt and interest payments over the past decade.- Fiscal Proposals: Moody's is rather underwhelmed by the potential of current plans to rein in deficits and mandatory spending.- Projected Fiscal Metrics: Deficits are forecasted to hit 9% of GDP by 2035, with debt projected to balloon to 134% of GDP[2].
- The downgrade in May 2025 was attributed to an alarming rise in government debt and interest payments over the past decade, echoing concerns about the escalating fiscal deficits.
- The current fiscal proposals were met with skepticism by Moody's, as they doubted the potential of these plans to significantly reduce mandatory spending and deficits, leading to the downgrade.
