Moody’s credit rating agency downgraded the credit rating of the United States government from Aaa to Aa1, citing the rising national debt as the primary driver behind the reduction in creditworthiness.
According to the May 16 announcement from the rating agency, US lawmakers have failed to stem annual deficits or reduce spending over the years, leading to a growing national debt. The rating agency wrote:
“We do not believe that material multi-year reductions in mandatory spending and deficits will result from the current fiscal proposals under consideration. Over the next decade, we expect larger deficits as entitlement spending rises while government revenue remains broadly flat.”
The credit downgrade is only one degree out of the 21-notch rating scale used by the company to assess the credit health of an entity.
An overview of the US national debt. Source: <a data-ct-non-breakable="null" href="https://usdebtclock.org/" rel="nofollow noopener" target="_blank"