08-02-2023, 07:54 PM
Yahoo Finance:
Obviously, that mustn't be allowed to happen.
Fitch Ratings’ downgrade of U.S. government debt has economists and investors puzzling over timing.
“Why now?” Mohamed El-Erian told Yahoo Finance Live. “When you look at the reason, you scratch your head as to the timing of this.”
Fitch’s downgrade is the second ever for the United States, after Standard and Poor’s cut on Aug. 2, 2011. That decrease was spurred by Congress’s fight to raise the debt ceiling and avoid a government debt default; an agreement had been struck four days earlier.
...El-Erian, president of Queens’ College, Cambridge University and an economic advisor to Allianz, said these are not new problems, and while the U.S. does have a high level of debt, the economy is growing enough that the debt burden doesn’t present a challenge right now.
“We don’t have a debt problem as long as growth continues to pick up, and one of the upside surprises has been not only that actual growth has picked up, but that potential growth is starting to be positively impacted by policy.”
Obviously, that mustn't be allowed to happen.