Econintersect: More buried news has been found. Five days ago credit rating agency Egan Jones downgraded the United States from AA+ to AA, according to an article dated 6 April by Fox Nation. In July 2011 the same agency downgraded the U.S. from AAA to AA+ just days before Standard & Poor’s did the same. According to RT.com, analysts say the three major rating agencies may follow suit. Moody’s and Fitch still have the U.S. with a top credit rating (AAA) but all four agencies have a negative outlook. RT also quotes analysts who give political gridlock as one of the major reasons for lower credit ratings for the U.S.
Here are some details from Fox Nation:
Egan Jones warned. “Without some structural changes soon, restoring credit quality will become increasingly difficult . . . without some structural changes soon, restoring credit quality will become increasingly difficult.” They added that there was a 1.2% probability of U.S default in the next 12 months. The company cited the fact that the US’s total debt, which now equals its total GDP, is rising and soon will eclipse the national GDP; the company sees the debt rising to 112% of the GDP by 2014.
- US credit rating: AAA – how long will it stay? (RT.com, 9 April 2012)
- Another Credit Agency Downgrades US (William Bigelow, Fox Nation, 6 April 2012)
- Federal Reserve: Can We Run Out of Money? (Stephanie Kelton, GEI Analysis, 3 April 2012)
- U.S. Facing Insolvency by Ignorant Choice (Derryl Hermanutz, GEI Analysis, 26 December 2011)