It’s only the second time that confidence in the federal government’s ability to manage its debt has been officially reduced. So it’s a big deal.
It turns out Democrats’ unlimited appetite for spending and their refusal to address growing deficits isn’t sitting well with close watchers of our economy, and this should serve as a warning that inaction is no longer acceptable.
Despite the left’s attempt to dump all of the credit downgrade blame on Republicans (who worked to trim spending) for the debt ceiling showdown earlier this year, the report from Fitch Ratings spells out much bigger concerns about the U.S. fiscal outlook and the need for a spending overhaul.
The agency downgraded the nation’s credit rating from AAA to AA+. Although still a good rating, the lost confidence is noteworthy.
As Fitch states: “The rating downgrade of the United States reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to ‘AA’ and ‘AAA’ rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions.”
Jack Smith’s Trump indictment saves the day for Biden
This very bad news for the U.S. economy came at nearly the exact moment that Jack Smith, special counsel for Biden’s Justice Department, announced on Tuesday the latest indictment against former President Donald Trump for his alleged efforts to overturn the results of the 2020 election.
As the debt increases, economic growth slows – and leads to even higher interest rates.
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“We’re at about $32 trillion now and we’re talking about $100 trillion over the next 30 years,” says Romina Boccia, director of budget and entitlement policy at the Cato Institute. “That’s crazy.”
If there’s an upside to the downgrade, it’s that Americans and our elected representatives may start paying more attention to the problem.
“I think that the Fitch downgrade brings needed attention to the fact that the debt deal that Congress struck at the end of May is completely inadequate for addressing the growth in the debt and the unsustainable spending path the United States government is on,” Boccia says.
All is not lost. There are some responsible lawmakers in Congress who are taking action on reining in the government’s spending addiction.
Last month, the Bipartisan Fiscal Forum launched publicly with the goal of identifying and addressing the largest drivers of the national debt. It’s led by U.S. Reps. Bill Huizenga, a Republican from Michigan, and Scott Peters, a California Democrat. The first action will be to form a fiscal commission that should take some of the partisanship out of budget cutting.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, told me in an email that the “group is a constructive step forward for lawmakers to tackle tough budget challenges.”
Cato’s Boccia also thinks such a commission is the best way to tackle the debt crisis. Democrats and Republicans are both to blame for long-term failures to address the debt – after all, no one wants to be the lawmaker accused of touching Social Security or Medicare while facing reelection.
The nation’s fiscal health truly affects us all – our own future and future generations. Americans should demand Congress and Biden start taking fiscal responsibility seriously.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
