Fitch: U.S. Credit Outlook ‘Negative’
One of the three major credit rating agencies has put the United States on negative credit watch:
Following the failure of the supercommittee, the U.S. government’s AAA credit rating was placed on a “negative outlook” Monday by Fitch Ratings, indicating a more than 50 percent chance the country gets slapped with another downgrade in the next two years.
“By postponing the difficult decisions on tax and spending until after forthcoming congressional and presidential elections, the scale and pace of required deficit reduction will consequently be greater,” Fitch said in a statement.
“Conversely, failure to reach agreement in 2013 on a credible deficit reduction plan and a worsening of the economic and fiscal outlook would likely result in a downgrade of the U.S. sovereign rating.”
Fitch for the time being didn’t change the triple A credit rating.
This isn’t entirely surprising. The August debt deal was just a temporary fix, and all we did was kick the can down the road. Honestly, though, I’m not among those who really considers the Super Committee a failure. It was absurd to think that a far reaching budget reform deal was going to be reached before the 2012 elections to begin with. The question is whether we’ll be able to reach one after the 2012 elections.