We use to have the highest investment grade government issued debt in the world.  It was just down graded.  Again.

A down grade and lower investment grade means the issuer has to offer a higher rate of return to offset the higher risk.  This means the costs of issuing and servicing new debt will rise.  Which will only add to the problem as it will costs more to issue the same amount of debt.

This country needs to get its financial house in order ASAP.  But our "leaders" will most likely continue to kick the can down the road.  Eventually that "can" is going to turn into a concrete cinder block.  And it won't be able to be kicked any further.

https://www.foxbusiness.com/economy/fitch-downgrades-us-long-term-ratings-aaa-aa

Quote

“How did you go bankrupt?"
Two ways. Gradually, then suddenly.”

― Ernest Hemingway, The Sun Also Rises

Wish I could accurately estimate when "gradually" is going to become "suddenly"...

History of US credit downgrades if anyone wants more back story:

https://en.wikipedia.org/wiki/United_States_federal_government_credit-rating_downgrades

I forget what exactly I was watching.  A documentary, political commentary, financial radio, etc. But this had stuck with me ever since.

The discussion was about people who lived through the Great Depression.  One of the common recurring points was how quickly, almost violently, it occurred. 

One moment it was the Roaring Twenties.  Then suddenly it was chaos.

IMHO we are teetering towards chaos.

Bidenomics hits a low note.

Biden Team Throws a Fit Trying to Spin Fitch Downgrading US Credit Rating – RedState

In a related matter...

Yields Surge After Treasury Boosts Auction Sizes More Than Expected, Sees Debt Issuance Tsunami On Deck | ZeroHedge

"...the endgame here is the first ever $1+ trillion in US interest payments which we expect will hit within the next 2 quarters..."

https://market-ticker.org/akcs-www?post=249434

 

Quote

Fitch didn't go far enough; both S&P and Fitch should have cut the current credit rating to "A" (single A) and made clear that in 12 months its going to BBB if the budget is not immediately balanced and a small cash-basis surplus established, and that in another year the rating will go to junk if Congress doesn't act.

Exponential expansions always end and they always look perfectly ok until shortly before panic sets in as the inevitable looms.  Always.  Humans are terrible at sussing these out before the wall comes into full view around the corner as you're doing 80mph; its one of humanity's blind spots.  Unlike the BS run on "climate" and similar this one is real and we're there -- right here, right now.

 

Why don't we just trust them all again?

What it really meant when US Treasury securities were just downgraded - American Thinker

Everybody got a raft?

Here Comes the Tsunami of Longer-Term Treasury Notes & Bonds: Monthly Auction Sizes +60% by August Next Year | Wolf Street

Actually, that Fitch downgrade is a big deal -economist Steve Hanke - American Thinker