US media: Credit rating downgrade reflects failure rating of US political leadership | US | Politics
Washington, August 2 (Xinhua) - International rating agency Fitch Ratings downgraded the default rating of long-term foreign currency issuers in the United States from AAA to AA+on August 1. The Wall Street Journal published an editorial on the 2nd stating that the rating downgrade is a vote of no confidence cast against American political leaders, reflecting the failure of American political leadership.
Fitch Ratings pointed out in a statement that the downgrade of the US credit rating is mainly due to the high and increasing debt burden of the US government, and the fiscal situation is expected to continue to deteriorate over the next three years. Over the past 20 years, the United States has repeatedly experienced political deadlocks on its debt ceiling, often dragging on solutions until the very last moment, weakening people's confidence in its fiscal management capabilities.
The Wall Street Journal editorial believes that Fitch's downgrade of the US credit rating highlights a lack of seriousness in US economic decision-making. The article states that the reason why the United States did not have its credit rating downgraded earlier and more frequently is because the US dollar remains the world's reserve currency, but this "arrogant privilege" is not innate. If the market perceives a broader decline in US government governance or ability to fulfill financial obligations, this privilege may disappear instantly.
The article also argues that since Standard&Poor's downgrade of the US credit rating in 2011, the US fiscal and political outlook has significantly deteriorated. Fitch Ratings only downgraded the US credit rating to AA+this time, indicating that its assessment of the US fiscal outlook is even "overly optimistic".
The New York Times also reported that the rating downgrade is a stain on the US fiscal management record, but Fitch's move is unlikely to persuade US politicians to significantly change their fiscal policy direction.