CHINESE CREDIT RATING AGENCY DOWNGRADES U.S. AFTER DEBT CEILING RAISED

Posted 10.17.13 by Matthew Burke, TPNN News Editor

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Recall all the “cry wolf” warnings from the left, including from Obama and his cheerleaders in the media, that the U.S. would get their credit rating slashed if we didn’t raise the debt ceiling, which enables the bloated government to continue to spend more than it takes in? Well (of course) the opposite is true, as a Chinese credit rating agency (similar to Standard & Poors or Moody’s in the U.S.) has downgraded U.S. sovereign debt. As referenced on the Drudge Report, and as reported by France24 (emphasis added):

A Chinese ratings agency downgraded its US sovereign credit rating Thursday despite Washington’s resolution of the debt ceiling deadlock, warning that fundamentals for a potential default remained “unchanged”.

Dagong lowered its ratings for US local and foreign currency credit from A to A-, maintaining a negative outlook, the agency said in a statement.

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The announcement came after the US Congress passed and President Barack Obama signed a bill that extends the nation’s borrowing authority and ends a two-week government shutdown.

The fundamental situation that the debt growth rate significantly outpaces that of fiscal income and gross domestic product remains unchanged,” Dagong said in the statement, adding Washington’s solvency was vulnerable as old debts were still repaid through raising new debts.

Unlike U.S. politicians, credit experts understand that money doesn’t grown on trees. They understand that any entity, whether it’s an individual citizen, a business, or a city, state or federal government that continues to grow its debt at much faster rates than the corresponding rise in its income, is an increased credit risk. For decades, U.S. taxpayer real income has been stagnant for over a decade, while government spending has doubled since 2001, having gone from $1.9 trillion to $3.8 trillion. During the Obama regime, in under five years, the national debt has exploded from an already huge $10 trillion to a gargantuan $17 trillion (rounded).

The recent short-term “fix” does nothing to address the long-term spending problem in the United States. China, which owns over 20% of U.S. debt, understands this. They understand that the deal that McConnell-Reid worked out is nothing more than kicking the can down the road until January 15th, when this charade will be repeated again.

 

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