The absence of a substantial short-term response to Fitch’s debt downgrade should not encourage continued complacency on the nation’s long-term trajectory. Two of the nation’s three biggest bond rating agencies — Fitch and— now give U.S. debt a slightly diminished rating. The best way for Mr. Biden and Republicans and Democrats in Congress to prove Fitch and S&P wrong is for lawmakers to begin to tackle the country’s long-term fiscal challenges, starting with Social Security.
Costs are rising much faster than revenue, especially with an aging population. U.S. debt as a share of the economy is on track to surpass even World War II levels , the Congressional Budget Office warns. No one knows when or if the debt will reach a crisis point, but the risks grow as the debt level swells.Even if there isn’t a calamity moment, rising debt and interest costs harm the economy as more national wealth goes to debt service and fewer dollars remain for public or private investment in research, infrastructure, education and other areas that can boost growth.