{"id":23448,"date":"2023-09-28T10:16:48","date_gmt":"2023-09-28T10:16:48","guid":{"rendered":"https:\/\/www.xtreamforex.com\/?p=23448"},"modified":"2023-09-28T10:16:48","modified_gmt":"2023-09-28T10:16:48","slug":"former-sp-ratings-chairman-says-u-s-weaker-now-than-2011-downgrade","status":"publish","type":"post","link":"https:\/\/www.xtrememarkets.com\/MU\/former-sp-ratings-chairman-says-u-s-weaker-now-than-2011-downgrade\/","title":{"rendered":"Former S&P Ratings Chairman Says U.S. Weaker Now Than 2011 Downgrade"},"content":{"rendered":"

Former S&P Ratings Chairman Says U.S. Weaker Now Than 2011 Downgrade<\/strong><\/h1>\n

The U.S. currently finds itself in a weaker state compared to the time of S&P’s 2011 downgrade of its sovereign credit rating, as per the former chairman of the agency’s sovereign rating committee. With the looming Oct. 1 deadline, the world’s largest economy faces the possibility of another government shutdown, contingent on the passage of a spending bill by lawmakers in Washington.<\/span><\/p>\n

House Speaker Kevin McCarthy’s precarious position entails not losing more than four votes among fellow Republicans in the House of Representatives. However, he faces opposition from hard-right caucus members demanding deeper domestic spending cuts.<\/span><\/p>\n

Moody’s recent warning highlights the potential harm to the country’s credit in the event of a government shutdown. Fitch had already downgraded the long-term U.S. sovereign credit rating by one notch in August due to the latest political standoff over raising the debt ceiling.<\/span><\/p>\n

In 2011, S&P made a controversial downgrade from AAA to AA+ due to political polarization after a debt ceiling dispute in Washington. John Chambers, the former chairman of the Sovereign Rating Committee at S&P Global Ratings during the 2011 downgrade, asserts that the U.S.’ fiscal position is presently even weaker than it was back then. He cites the current general government deficit of over 7% of GDP and government debt at 120% of GDP, emphasizing the weakening governance and political fractiousness as contributing factors.<\/span><\/p>\n

Chambers points to government shutdowns, debt default concerns linked to the debt ceiling, and the January 6th, 2021, Capitol incident as outcomes of this weakened governance.<\/span><\/p>\n

House Speaker McCarthy may need Democratic support to secure the necessary votes and prevent a shutdown, but hard-line Republicans have discussed potentially ousting him if a compromise is reached.<\/span><\/p>\n

Past debt ceiling disputes have nearly pushed the U.S. to default on its bills. Fitch’s August downgrade reflected concerns over “expected fiscal deterioration over the next three years” and erosion of governance due to “repeated debt-limit political standoffs and last-minute resolutions.”<\/span><\/p>\n

While the downgrade garnered attention, it was largely considered immaterial by prominent bank leaders and economists.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Former S&P Ratings Chairman Says U.S. Weaker Now Than 2011 Downgrade The U.S. currently finds itself in a weaker state compared to the time of S&P’s 2011 downgrade of its sovereign credit rating, as per the former chairman of the agency’s sovereign rating committee. With the looming Oct. 1 deadline, the world’s largest economy faces<\/p>\n... continue reading<\/a>.","protected":false},"author":1,"featured_media":23449,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[17],"tags":[94,168,165,19,24,157,22,201],"yoast_head":"\r\nFormer S&P Ratings Chairman Says U.S. Weaker Now Than 2011<\/title>\r\n<meta name=\"description\" content=\"The U.S. currently finds itself in a weaker state compared to the time of S&P's 2011 downgrade of its sovereign credit rating\" \/>\r\n<link rel=\"canonical\" href=\"https:\/\/www.xtrememarkets.com\/MU\/former-sp-ratings-chairman-says-u-s-weaker-now-than-2011-downgrade\/\" \/>\r\n<meta property=\"og:locale\" content=\"en_US\" \/>\r\n<meta property=\"og:type\" content=\"article\" \/>\r\n<meta property=\"og:title\" content=\"Former S&P Ratings Chairman Says U.S. Weaker Now Than 2011\" \/>\r\n<meta property=\"og:description\" content=\"The U.S. currently 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