More testy waters ahead for President Trump as Moody’s credit rating has just made the shocking decision to lower the US credit rating from Aaa to Aa1.
Moody’s has predicted that if the United States continues on the trend that it’s on, in 10 years interest payments could consume 30% of federal revenue. This news ironically came out at the same time as Trump was pushing a bill that would continue tax cuts from his first term that would potentially raise the deficit higher than its current state, which is already worrying.
This upward trend of the debt-to-GDP ratio has been steadily climbing for a while and officially passed 100% in 2013 — which is officially the point where borrowing money becomes more expensive because creditors start safeguarding themselves against a potential non-payment. That’s also the point at which governments officially have less money for infrastructure developments, so vital organs like airports can grow dilapidated. However, the US has a unique advantage in that the dollar still remains the world’s currency. But a loss of trust in its allies and a rise in BRICS could complicate matters further.
However, Moody’s also added that they’re not just looking at the debt but also the political situation — stating that neither party has made any meaningful steps towards dealing with the rising debt issue. The Trump administration remains bullish that everything is fine, however. Yahoo! Finance reports that Trump’s spokesman Steven Cheung singled out one economist at Moody’s Analytics called Mark Zandi, claiming nobody takes his ratings seriously.
Cheung claims that Zandi has been a longtime critic of Trump, which taken solitarily is certainly a detail that would muddy the waters. However, New York Times reports that Fitch Ratings and S&P Global Ratings had also lowered the US credit ratings at an earlier time. And this certainly tracks with how the Trump administration employs their “alternative facts” model. If they lose a case, the judge is biased. If they lose a credit rating, the analyst is unreliable. If they lose an election, it was rigged.
On social media, users are cynical and employing a healthy dose of dark humor. One said this is exactly what you win when you play stupid games.
Play stupid games. Win stupid prizes. https://t.co/QdAyFdhG5I
— Jessica Tarlov (@JessicaTarlov) May 16, 2025
Another user poked, “Are we winning yet?”
From the leading economy in the world to losing our AAA rating in just four months. Are we winning yet?
— Fred Wellman (@FPWellman) May 16, 2025
President Trump’s political maneuvering is dominated by rhetoric. But as far as policy, he’s only been trying to hoodwink experts with promises and threats. But math is math — not even Terrence Howard’s new math can save him on this.
What this means is that Trump is painting the US into an economic corner where the debt is dramatically going to skyrocket in the next couple of years. As he champions himself as the master dealmaker, he has walls closing in, and this time he can’t just use immigrants as an excuse. He probably needs to make a trip to Europe now more than ever and treat his allies with the respect they deserve so that they can make deals that can help the economy grow. That’s the only way out of this.
This is the first time the US credit has dropped since 1917.
Published: May 17, 2025 11:27 am