Why did the US lose its AAA credit rating?

10 years ago today, Standard & Poor’s made a $2.1 trillion math error, fought with the Treasury for several hours, then downgraded America’s credit rating from AAA to AA+. Not because America’s debt was problematic, but because they didn’t like how politicians were squabbling over the debt ceiling.

Why was the US credit rating downgraded?

“More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18.

When did GE lose its AAA rating?

2009
The company lost its AAA rating in 2009, and tougher capital rules for large financial institutions suddenly became an albatross — along with its massively underfunded pension — that began a slow descent to the edge of junk.

Why did S&P downgrade US debt?

A decade ago, political strife provoked S&P to downgrade U.S. debt. The strife got worse, but the debt took flight on a joyride that hasn’t ended.

When was the US credit rating downgraded?

August 5, 2011
United States federal government credit-rating downgrades/Start dates

What is a AAA credit rating?

AAA ratings are issued to investment-grade debt that has a high level of creditworthiness with the strongest capacity to repay investors. The AA+ rating is issued by S&P and is similar to the Aa1 rating issued by Moody’s. It comes with very low credit risk and indicates the issuer has a strong capacity to repay.

When did US credit rating get downgraded?

Aug. 5, 2011
Friday, Aug. 5, 2011, was a sad day in American fiscal history. It was the day the credit rating firm Standard & Poor’s (S&P) downgraded the credit rating of the United States from AAA to AA+.

When was the last time the US debt was downgraded?

2011
In 2011, S&P downgraded the top rating of the United States by a notch to its current AA-plus level. U.S. Treasury Secretary Janet Yellen has warned that the government could run out of cash by Oct. 18 if the debt ceiling is not raised or suspended, leading to its first-ever default.

Is AAA a good rating?

AAA is the highest possible rating that may be assigned to an issuer’s bonds by any of the major credit rating agencies. AAA-rated bonds have a high degree of creditworthiness because their issuers are easily able to meet financial commitments and have the lowest risk of default.