After months of squabbling and dysfunction in Washington, D.C., a majority of economists think the U.S. will lose its sterling AAA credit rating from at least one of the big ratings agencies — Standard & Poor's, Moody's, or Fitch — even if Democrats and Republicans strike a last-minute deal on raising the debt ceiling. Lawmakers have less than a week left to push the borrowing limit above $14.3 trillion before the government runs short of money to pay all of its bills. Is there any way to avoid a downgrade now?
Yes. But Congress must stop playing politics: A credible deficit-reduction plan will prevent a downgrade, says Daniel Indiviglio at The Atlantic. But such a plan would have to do three things: Raise the debt ceiling, reduce the deficit, and minimize the risk of another politicized showdown like this one. "If a deal doesn't prevent downgrade, then it's a waste of time." Unfortunately, the Republican plans are short term — all but guaranteeing another damaging showdown like this next year.
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