On Tuesday, Fitch Ratings became the second of the three major credit-rating firms to remove its coveted triple-A assessment of the United States government’s credit worthiness: The US Government’s Debt Has Been Downgraded. Here’s What to Know [1].
This is the result of “Bidenomics,” which is based on the mistaken belief that the government can recklessly spend money it doesn’t have to pay for social programs it cannot afford, running up massive annual budget deficits, and adding greatly to a national debt that now exceeds $32 trillion.
In fairness, this reckless spending is nothing new, just greatly accelerated under the Biden administration. The last time the federal government had a balanced budget was in FY 2000, at the end of the Clinton administration. Since then, the feds have consistently spent more money than they have taken in every single year.
Folks, there are only three ways to solve this problem: 1) the pursuit of aggressive policies that are designed to grow the economy, 2) significant spending cuts in discretionary programs and a reevaluation of many non-discretionary programs, and 3) targeted tax increases that are dedicated to long term debt reduction. There is no other way to get us out of this mess.
The question is, will our “leaders” in Washington be able to muster the courage and the consensus to tackle this issue and put the country back on a more stable financial footing? Unfortuantely, I think we all know the answer to that question.