“Political Dysfunction Spurs Moody’s to Slash US Credit Outlook “.

The long-term credit outlook of the United States is going down as one of the leading independent credit rating agencies, Moody’s Investor Services, has lowered its stable outlook on the American economy to “negative.” The move is unprecedented, as the US has not had a negative credit outlook since the Great Recession of 2008. The cause of this move is being attributed to the growing political strife and dysfunction in Washington that has bogged down efforts to pass meaningful economic reform. This comes alongside a budget impasse and the ongoing threat of a government shutdown. It is believed that these issues, if unresolved, could contribute to a slower-than-expected economic recovery and a lack of confidence in the long-term fiscal health of the country. Moody’s noted in its report that US sovereign debt, which has been increasing since the Great Recession, also adds to doubts about the country’s long-term stability. The current deficit stands at a staggering $20 trillion, and is expected to hit the $30 trillion mark within the next decade. It is feared that the current political climate could lead to further economic instability, stifling growth and ultimately leading to a pernicious slowdown. The US’s credit rating, which is currently AAA, has been remarkably stable over the last decade and is one of the few financial benefits it still holds over its peers. Despite the stern warning from Moody’s, it is not expected that the rating will be revised anytime soon. However, a significant debt increase, or failure to address the current issues, could lead to a downgrade in the future. Moody’s has warned the US government that reckless financial management and a lack of willingness to make difficult Economic jobs are a recipe for disaster. The US must change its political tactics and move away from partisanship if it wants to maintain a steady AAA rating. Only then can the country hope to weather the current storm and get back on the path to fiscal stability.