US Economy - Government Debt Might Reduce U.S. Triple AAA Credit Rating, Warn S&P, Moody’s Credit Rating Agencies | Staho.com

On Thursday two major credit rating agencies, Standard & Poor’s and Moody’s Investors Service, warned that the U.S. might lose its triple AAA credit rating if its government debt Keeps growing.
The two separate statements, made within hours of each other, were seized as further evidence that the U.S. must reduce spending and debt to avoid disaster.

On the other hand, many economists say the reckoning, if there will be one, is still years or even decades away. The bond market was not affected by Thursday’s news. However, while some experts who want to see the deficit reduced argue now is not the time to cut federal spending given the weak economy and high unemployment, others fear the mounting government debt.

In a quarterly report on the nation’s credit risk, Moody’s Investors Service said the probability of revising is outlook on its triple AAA rating for the United States – from stable to negative – within the next couple of years is increasing. This would not actually reduce the credit rating, but even a small revision would likely rattle financial markets and might even limit America’s ability to borrow the money necessary for financing its deficit. Moody’s has been rating U.S. government debt since 1917, and has always rated it triple AAA.

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