Blow Donald Trump’s story? Moody’s Strips US Government of Gold-Standard AAA, Credit rating, cuts it into AA1
Moody’s ratings downed the Credit rating of the United States government on Friday, which indicates the inability of administration to control government debt levels.The reduction in credit rating of AA1 from AAA faces challenges for US President Donald Trump, on the day his main expenses, working with the law, failed to secure the approval of the important Congress due to the resistance of the main conservative republican members.According to an AFP report, this development reduces the claims of Donald Trump about economic strength and financial success.The White House responded to X, where Communications Director Steven Chewing specifically criticized Mark Zandi, Chief Economist, Moody’s Analytics.“Nobody takes his ‘analysis’ seriously. He has again proved to be the wrong time and time,” Chewn posted.Also read Why India Donald Trump can be a big winner of the 2.0 era if he plays his card rightAmong the three major global rating agencies, Moody is the last one to reduce the Credit status of the US federal government. Standard and Waris implemented its downgrade in 2011, followed by the first fitch rating in 2023.Moody’s reduced the ratings from Premium AAA to AA1, while accepting that the US “maintains its economy’s size, flexibility and dynamics and the outstanding credit benefits, including the role of US dollar as a global reserve currency.Moody’s issued a statement that indicates that the federal deficit is estimated to expand by about 9% of the US economy by 2035, growing from 6.4% in 2024. This growth has been held mainly responsible for high loan interest payment, increase in entitlement expenditure and insufficient revenue collection.The rating agency stated that in 2017, Donald Trump’s implemented tax deduction during the Presidency, which the Republican-controlled Congress supports, would contribute $ 4 trillion in the next ten years, except for additional payments in federal primary deficit.Also read ‘Don’t want you Building in India’: Donald Trump’s clear message to Apple CEO Tim Cook for ‘Make in’; It is said that India can take care of itselfThe American political landscape remains divided, preventing effective management of adequate deficit. The Republican party stands against the growth, while democrats oppose the decrease in spending.The House Republican faced a shock on Friday when they failed to pursue a sufficient package to spend the tax benefits and spend the deduction through the budget committee. The proposal was defeated when several conservative Republican MLAs demanded a deep deduction of the environmental energy tax encouragement of the Medicid and Biden, voting with all the democratic members in the opposition.
