Moody’s, one of the world’s leading credit rating agencies, has downgraded its rating outlook on the United States from “stable” to “negative.” This change in outlook comes as a result of the increased political dysfunction currently affecting the country.
Moody’s cited the high degree of political polarization and rising animosity between the two major political parties in the United States as a primary factor behind the outlook change. This increased partisanship has made it very difficult for the government to pass new laws and implement much needed reforms. Furthermore, Moody’s noted that policy makers have been unable to address key issues such as the nation’s growing national debt.
The outlook change has given Moody’s cause for concern when it comes to the over-leveraged government and its potential for further credit downgrades in the future. strategyright now when it comes to ensuring a brighter future for the United States. Moody’s added that while some short-term, temporary measures can be put in place to address the current issues, “longer-term solutions are needed to restore fiscal balance and debt sustainability.”
Moody’s outlook change serves as a warning to Americans that political dysfunction in Washington is increasing the risks of growing U.S. debt and fiscal imbalance. The agency’s report also highlighted the need for policy makers to work together to avoid any further downgrades.
Though the outlook change does suggest some cause for concern, it remains to be seen how this will affect markets and other economic indicators. The United States’ economic health remains a central factor in global stability, and many will be watching the current situation with a sense of caution. At the same time, Moody’s outlook change could provide the stimulus needed for policy reform and could ultimately revive the economy.