“For a warning about America’s fiscal future,” said The Wall Street Journal in an editorial, look at Thursday’s move by Standard & Poor’s to downgrade Britain’s credit outlook, putting its topnotch AAA rating at risk. “Humiliation aside,” a downgrade would hurt Britain by raising public borrowing costs. The U.S. might want to keep this in mind as it follows the U.K. down the path of “out-of-control spending.”
America’s ballooning deficits are already hurting its borrowing capacity, said Mark Gilbert in Bloomberg. But the U.S. isn’t alone: Arguably, no government deserves “a top credit grade in the current financial climate.” Downgrading the U.S. to a “very strong” AA, from its “extremely strong” AAA, seems appropriate, if the rating agencies aren’t “too cowardly” to follow through.
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