Neil Irwin, economics writer for The Washington Post,
notes in his blog this morning one glaring irony of the debt ceiling debate in
Washington: tea party Republicans, by claiming that a U.S. default is not a
major concern, have created the beginnings of an economic downturn simply by
irrationally downplaying the economic impact.
In addition, Fitch’s statement notes the declining federal deficits and increasing financial stability in Washington. It’s the reckless rhetoric that has riled the markets.
Here’s a portion of what Irwin wrote:
“It turns out that if you have a major political
party arguing that a government debt default wouldn’t be that big a deal, it
makes people start to wonder just how creditworthy your government really is.
That’s the lesson of the decision late Tuesday by Fitch, one of the three major
credit-rating firms, to put the U.S. government on “Ratings Watch
Negative” for a possible downgrade of the nation’s AAA credit rating.
party arguing that a government debt default wouldn’t be that big a deal, it
makes people start to wonder just how creditworthy your government really is.
That’s the lesson of the decision late Tuesday by Fitch, one of the three major
credit-rating firms, to put the U.S. government on “Ratings Watch
Negative” for a possible downgrade of the nation’s AAA credit rating.
“…The irony in Fitch’s statement resides in the pains
it takes to point out the soundness of the fundamentals of the U.S. debt
picture.
it takes to point out the soundness of the fundamentals of the U.S. debt
picture.
“…The United States is not facing anything resembling a
traditional debt crisis, like those faced by Greece and Argentina in the recent
past. This is a different sort of animal, the Fitch analysts strive to make
clear — a scenario in which it is political actors, not economic fundamentals,
that are posing a risk to the creditworthiness of the world’s largest
economy.”
traditional debt crisis, like those faced by Greece and Argentina in the recent
past. This is a different sort of animal, the Fitch analysts strive to make
clear — a scenario in which it is political actors, not economic fundamentals,
that are posing a risk to the creditworthiness of the world’s largest
economy.”
