Thursday marks an infamous anniversary: the one-year anniversary of bond rating agency Fitch downgrading the United States of America’s credit rating one notch down from AAA. A bond downgrade is like a personal drop in your credit score—it means borrowing costs are higher because financial health is weaker.
America’s downgrade is courtesy of the Biden-Harris administration, and now progressive heir-apparent, Vice President Kamala Harris, owns this economic mess.
How did we get here? And where would a Harris White House take us? Short answer: Left-wing economic policies caused this mess and will cause a nosedive further down the credit score ladder.
Harris hails from San Francisco, one of the most fiscally irresponsible cities in a state that has people and businesses fleeing to other states like Texas and Florida. Harris’ Senate voting record shows she is far to the left of President Biden and is even more liberal than Sen. Bernie Sanders.
Harris cast the tie-breaking vote on a massive spending bill adding trillions to our national debt and creating booming inflation causing family budgets to suffer. Even Democrat economist Larry Summers, an advisor to former President Obama, acknowledged that this bloated, Harris-approved government sparks inflation.
Harris’ inaccurately-named “Inflation Reduction Act” contributed to the average after-tax income to drop among taxpayers at every income level. When Harris joined Biden in the White House, in January 2021, $100 back then sadly today only buys just $83.26 in consumer spending today.
Harris supports the PRO Act, a national bill whose California version guts self-employment and the gig economy. During her 2020 presidential campaign, Harris backed “Medicare for All”—more massive government spending—and Harris said she wants to abolish private insurance. Harris also advocated a $10 trillion “Green New Deal,” and embraces hiking energy costs by opposing offshore drilling, fossil-fuel leases on public lands, and fracking (though she’s backpedaling on fracking now in hopes of pandering to Pennsylvania).
One year out from this sad anniversary, have we improved at all on our country’s economic health? Well, for starters, we aren’t on track for an upgrade, and in many areas, we’re far worse—especially our astonishingly high debt and interest payments.
On Monday, America hit another, related grim milestone: $35 trillion on our national debt. The House Budget Committee Republicans point out:
The gross national debt is currently $35 trillion. This equates to:
- $104,497 per person
- $266,275 per household
- $483,889 per child
The debt one year ago was $32.65 trillion, meaning that the debt has increased by $2.35 trillion over the past 12 months. This rate of increase equates to:
- $196 billion in new debt per month
- $6.4 billion in new debt per day
- $268 million in new debt per hour
- $4.5 million in new debt per minute
- $74,401 in new debt per second
Our national debt interest payments are ballooning and will soon crowd out important necessities. Shockingly, interest payments on the national debt just eclipsed our spending on defense and Medicare.
I spoke to my former colleague Michael Faulkender, chief economist for the America First Policy Institute and the Dean’s Professor of Finance at the University of Maryland’s Smith School of Business about the bond downgrade’s impact.
“Continued deterioration of the nation’s finances results in rating downgrades and increased borrowing costs,” Faulkender said. “Higher interest rates are normally thought to deter economic growth and therefore reduce inflation. On the other hand, if the higher interest rates raise borrowing activity of the federal government and the government increases the money supply to pay for the higher interest rates, then yes it is inflationary.”
Fortunately, there are pathways out and a way up for our bond rating to climb back to AAA. The Trump campaign’s Agenda 47 offers a blueprint for sparking economic growth by reducing job-killing regulations and taxes. And the House Budget Committee’s FY 2025 Concurrent Resolution on the Budget offers a much-needed roadmap on the path toward a healthy financial recovery.
America’s truly facing a time for choosing our financial future.