IT’S THE SPENDING, STUPID: How Biden’s debt deal paved the way for the next financial mess.

Fitch Ratings, one of three major credit agencies, has already put the U.S. on notice that its top-tier rating could be dented even after President Joe Biden and House Speaker Kevin McCarthy reached a deal to suspend the debt limit until 2025.

Now, Fitch says it isn’t convinced that policymakers can set the nation’s finances on a sustainable path because of the polarization roiling U.S. politics, suggesting that a downgrade on Treasury securities could be on the way — the second in U.S. history.
“It’s not just the debt limit,” James McCormack, Fitch Ratings’ managing director and global head of sovereign and supranational ratings, said in an interview. “What we’ve seen in the United States is a steady deterioration in governance.”

Washington has an infinite appetite for spending, no real restraint thanks to the Fed happily monetizing each trillion-dollar-fad-of-the-moment, and near-endless obligations already on the books.

The rot runs so deep that my guess is that each side just hopes not to be the ones behind the wheel when we finally go off the cliff.