FitchRatings is affirming the “AAA” rating of the United States. Unfortunately, the ratings agency is cutting the outlook on the long-term rating to NEGATIVE from STABLE. As noted: Fitch’s current assessment is that the U.S. economic recovery will regain momentum in the latter half of next year and into 2013, and that a period of above trend growth will be subsequently followed by growth of at least 2.25% over the long-term. However, Fitch recognises that there is considerable uncertainty surrounding the economy’s potential output and scope for a period of above trend economic growth… with negative implications for the medium to long-term fiscal outlook.
- federal debt held by the public exceeding 90% of GDP;
- debt interest consuming more than 20% of tax revenues by the end of the decade
- including the debt of state and local governments, gross general government debt will reach 110% of GDP by the end of the decade