The lesson from the Moody’s credit downgrade is that the U.S. cannot borrow its way to prosperity.
by Veronique de Rugy
Reason.com
America’s debt-addicted government just lost its triple-A credit rating from Moody’s, as it previously had from fellow rating agencies S&P and Fitch. Many in Washington shrugged the move off as minor or as unfair treatment of the Trump administration. The truth is more sobering: a flashing red signal that the United States is no longer seen as a “perfect” credit risk and that politicians should stop pretending economic growth alone can bail us out.
Yes, the mess is real, and it’s because habitual deficit financing—the very disease fiscally-minded Founding Father Alexander Hamilton warned against—has become business as usual.
The reckoning comes as House Republicans push to extend the 2017 Trump tax cuts with a “big, beautiful bill.” If handled correctly, it’s a good idea.