America is in deep denial over debt

The downgrade in America’s credit rating was much criticised by the US government, says Alex Rankine. But was it a long time coming?

Low angle view of Federal Reserve Building, Washington DC
(Image credit: Getty Images)

A downgrade in America’s credit rating is “absolutely merited” given Washington’s “wildly reckless overspending”, says Stephen Miran in the National Review. Last week credit-rating agency Fitch cut the US government’s credit rating one notch from AAA to AA+, citing “a high and growing general government debt burden, and the erosion of governance” after June’s stand-off in Congress over the debt ceiling, which brought America close to default.  

Fitch is the second of the big three rating agencies to have cut the US rating from the AAA “gold standard”, says Rafael Nam on NPR. S&P Global took a similar step in 2011. Just nine countries retain an AAA rating from all three agencies. The public debt-to-GDP ratio in these nations averages 39%, compared with 112% in America. 

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Markets editor

Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019. 

Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere. 

He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful. 

Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.