It's Basically Assured That The US Will Get Another Debt Downgrade Next Year

trigger of a gun

Photo: Stephen Z on Flickr

Fitch is out with some noise about how there’s a good chance it would downgrade its AAA rating on US debt if there’s no big fiscal plan in place by 2013.Well, newsflash, there isn’t going to be a big, comprehensive fiscal plan in the next year (or probably in years) and therefore Fitch is going to have to downgrade US debt.

The US rating doesn’t effect US borrowing costs (or ability to borrow) so it’s mainly a political/psychological event. But still.

What’s annoying is that from an economic perspective, the big fears is that there WILL be fiscal tightening, so the message from Fitch is: Shoot yourselves in the head or get a downgrade.

Thanks for the choice.

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