Uncle Sam: Deadbeat

Fitch Downgrades U.S. Credit Rating [The Daily Reckoning] August 02, 2023 [WEBSITE]( | [UNSUBSCRIBE]( Uncle Sam: Deadbeat - Fitch downgrades U.S. government credit rating… - “Trump’s downgrade”… - A bipartisan effort to ruin the nation’s finances… [Shocking U.S. Map Exposes $1.2T Opportunity]( [Click here for more...]( Exactly 2,935 miles away from Wall Street lies the biggest profit opportunity of your lifetime. A little-known opportunity which is creating an average of $32.8 BILLION in new wealth EVERY SINGLE DAY… That’s $1.2 trillion per year… And if you act fast, you have the chance to get in on the action starting right away. Hurry, though – this video will be removed from the internet on Friday at 4PM. [Click Here Now For Details]( Annapolis, Maryland [Brian Maher] BRIAN MAHER Dear Reader, Reuters gives the news: Fitch downgraded the United States to AA+ from AAA, citing fiscal deterioration over the next three years and repeated down-to-the-wire debt ceiling negotiations that threaten the government’s ability to pay its bills. Thus Fitch becomes the second credit rating agency to embarrass the government of the United States. Standard & Poor’s executed the initial embarrassment in 2011… when it too stripped Uncle Samuel of his AAA rating. Why the second demotion? Why now? In Fitch’s own telling: There has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025. Here Fitch cites June’s “Fiscal Responsibility Act.” False Advertising Upon this atrocity’s passage we promptly filed a tort with the Federal Trade Commission of the United States. The rock of our case was Section 43(a) of the Lanham Act. This is the section of United States Code that tackles advertising — false advertising. That is because the thing’s title is the perfect negation of its content. In our filing we cited Mr. Ryan McMaken, of the Mises Institute: The deal in no way returns federal spending to pre-COVID levels. At best, the deal does “limit” spending by placing tentative caps on spending which — assuming they are not abandoned in the face of some new economic or geopolitical “emergency” — allow for a 1% increase in spending each year over the next two years… What all this really means is that discretionary spending… will continue upward without even a meaningful pause… That’s the most “thrifty” scenario. After all, it’s only a matter of time until there’s a recession and thus a need for “stimulus” and bailouts. Or Washington may decide the U.S. needs another full-blown war. At that point, all bets are off when it comes to spending. Two months after the atrocity passes… Fitch puts out its downgrade. It too — evidently — sniffs a rodent burrowed within the Fiscal Responsibility Act. Interest Payments on Debt Soon to Exceed $1 Trillion The United States Treasury presently appears before the credit markets, on its knees, empty cup in hand. During the present quarter it expects to borrow over $1 trillion — to merely keep it in funds. During the next quarter it expects to borrow an additional $852 billion. As Zero Hedge’s pseudonymous Tyler observes, these are borrowings “so staggering they are usually associated with economic crises.” Meantime, Mr. Durden projects that interest payments on United States government debt will exceed $1 trillion within the next two quarters. Is this the manifestation of fiscal responsibility? We harbor the gravest of doubts. [Secret Gold Back currency RUINING Biden’s plans for a digital dollar?]( There is a secret currency that’s beginning to spread across America. And you only have a limited time to claim one of these “Gold Dollars” for yourself. [Click here for more...]( And since you’ll be getting it as part of an upgrade I want to make to your account… You’ll be receiving one of these “Gold Dollars” as a FREE gift. You just have to watch this short 2 minute video I recorded for you and respond by Wednesday at midnight. [Click Here To Watch Now]( United States public debt excels $32.6 trillion… and swells by the day, by the month, by the year. Federal debt presently expands by multiples of revenues coming in. To simply maintain 2019 debt levels — when federal debt was $10 trillion lower — the Congressional Budget Office estimated Congress would need to increase revenues 11% yearly… while simultaneously hatcheting the budget 10% yearly. Will Congress hatchet spending 10% each year? June’s Fiscal Responsibility Act yields you your answer. No Free Lunch In 2019 the Brookings Institute gave the long-term consequences of profligacy. And these consequences are… grim: Sustained federal deficits and rising federal debt, used to finance consumption or transfer payments, will crowd out future investment; reduce prospects for economic growth; make it more difficult to conduct routine policy, address major new priorities or deal with the next recession or emergencies; and impose substantial burdens on future generations. And recall: The nation is presently sunk an additional $10 trillion in debt than the time this warning came issuing. Has this additional $10 trillion debt yielded an economic benefit? The 2019 gross domestic product equaled $21.3 trillion. The 2022 gross domestic product equaled $25.4 trillion. That is, the nation’s debt expanded at a rate 2.5 greater than its economic expansion. Our crystal-gazing reveals no clear 2023 reading. Yet JP Morgan’s soothsayers estimate second-half GDP will retreat -0.5% after advancing 1.5% in the first half. This is not the image of rambunctious economic growth. Well are we aware of the pandemic’s bulking impact upon the calculus. It represented a savage skewering of the figures. Yet the facts are the facts. And the facts inform us that the nation withers and groans beneath an additional $10 trillion debt load — a debt load that must be serviced — soon to the sweet, sweet tune of $1 trillion per year. The facts further inform us that the gross domestic product is not expanding at a rate to shoulder the additional burden. It is a terrible formula. [Over 62 And Collect Social Security? Take Action Immediately!]( [Click here for more...]( If you’re over the age of 62 and currently collect Social Security, you need to prepare now. Because Biden has given our country the worst inflation in decades – and many warn things will only get worse from here. Worse yet, the Social Security check you receive now may not keep pace with inflation… Which is why, if you don’t act now, you could fall behind in the months ahead. Is your retirement at immediate risk? [Click Here To Find Out]( “Trump’s Downgrade” Yet the Fitch downgrading wrung Treasury Secretary Yellen’s gizzard plenty hard. Thus she thunders: Fitch’s decision is puzzling in light of the economic strength we see in the United States. I strongly disagree with Fitch’s decision, and I believe it is entirely unwarranted. Its flawed assessment is based on outdated data and fails to reflect improvements across a range of indicators, including those related to governance, that we’ve seen over the past 2½ years. What transpired two and one-half years ago? Mr. Trump vacated 1600 Pennsylvania Ave. and the sitting president came in. Should it therefore stagger us that Ms. Yellen draws the bifurcation? Meantime, the sitting president’s administration labels Fitch’s downgrade the “Trump downgrade.” Moans Biden campaign drummer Kevin Munoz: This Trump downgrade is a direct result of an extreme MAGA Republican agenda defined by chaos, callousness and recklessness that Americans continue to reject. Donald Trump oversaw the loss of millions of American jobs, and ballooned the deficit with the disastrous tax cuts for the wealthy and big corporations. Of course this fellow is sharply partisan. We therefore apply a steep and immediate discount upon his laments. Yet he is correct in one specific sense… A Bipartisan Ruination Republicans have proven dismal fiscal stewards. As we have argued before: We expect Democrats to spend grandly and gorgeously. We expect them to ransack the Treasury. Since Roosevelt the Second they have read from the identical electoral blueprint. But Republicans traditionally existed for two purposes: to lower taxes — and to square the books. Like a sour old schoolmarm with steel in her eye and a rattan in her hand… they might not have been popular. But you knew where they were. And you could trust them — to a degree at least — with the checkbook. But these Republicans are no more. They have gone the route of fedoras, monocles and spats. They turned from their old-time fiscal religion, made their peace with Big Government… and got elected. Deficits Don’t Matter They labeled the old religion “root canal economics.” Republicans instead sat at the feet of Mr. Arthur Laffer, with his famous curve. They could spend like Democrats — without touching the taxpayer to any great degree. Deficits do not matter in the new catechism. Only a few Republican holdouts remain… to keep the tablets. And they wield very little might. Thus we find ourselves $32.6 trillion in debt without the economic expansion required to meet it. Thus the credit rating of the United States has absorbed a downgrade. In the 1870s the German government refused American bonds — "even if signed by an angel in heaven," as one fellow styled it. At the going rate… on some tomorrow… possibly not terribly distant… Much of the world will refuse American bonds… even if signed by an angel in heaven… Regards, [Brian Maher] Brian Maher Managing Editor, The Daily Reckoning [feedback@dailyreckoning.com.](mailto:feedback@dailyreckoning.com) Editor’s note: The doors to our [2023 Paradigm Shift Summit]( are officially open! And we’d like to add you to the guest list. 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But please don’t delay… We only have a limited number of seats for this event — and they’re selling out MUCH faster than expected… In fact, more than 30% have already been spoken for — and once they’re gone, they’re gone. So please… [Click Here NOW to Claim Your FREE Seat to The 2023 Paradigm Shift Summit]( Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:feedback@dailyreckoning.com) [Brian Maher] [Brian Maher]( is the Daily Reckoning's Managing Editor. Before signing on to Agora Financial, he was an independent researcher and writer who covered economics, politics and international affairs. His work has appeared in the Asia Times and other news outlets around the world. He holds a Master's degree in Defense & Strategic Studies. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. 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