It is painful for a person to learn his credit score has dropped, perhaps because he misused credit cards. But it is a disgrace that the top-notch credit rating of the United States may be downgraded because of the massive debt our country is piling up.
The United States enjoys a sterling credit rating — for now. But Moody’s Investors Service has issued a stark warning that our credit rating is in jeopardy. That day of reckoning is “substantially closer,” Moody’s reports, thanks to the exploding national debt — $12.6 trillion and moving fast toward a supposed “debt limit” of $14.3 trillion.
In effect, the agency thinks there is growing uncertainty that the United States will meet its debt obligations.
That is not only a national embarrassment. A lower credit rating means it would be even more expensive for the United States to borrow money, in the same way that individual borrowers must pay higher rates if they have poor credit. With next year’s interest payments on our national debt expected to hit $499 billion, surely no one thinks higher borrowing costs are desirable.
Moody’s said that for the United States and other nations to maintain top ratings, it will “require fiscal adjustments of a magnitude that, in some cases, will test social cohesion.”
And we can take no comfort in the fact that our nation has enjoyed top status since it was first rated in 1949. Japan has long been an economic powerhouse, too, but less than a year ago, its crippling debt led Moody’s to downgrade Japan’s rating.
We are being warned about our huge debt. But is Congress listening?