00:00 Josh
S&P Global out with a new note on US credit. The firm reiterating the current US sovereign credit rating, but saying it could be at risk of a downgrade amid the current economic uncertainty. For more on what this means, we’re bringing in Yahoo Finance senior columnist Rick Newman. Rick,
00:19 Rick
Hey Josh, I read this as uh S&P basically saying, uh, you guys in Congress and in the White House, you really better get it right or another downgrade is coming. So, they refer specifically to this budget gimmick that Republicans are considering. Uh it’s this thing called current policy baseline. Uh if you’re not a politics geek and you haven’t heard about that, you probably will if they if they really try to do it. Basically, that will let them uh pass a big tax cut bill without counting the deficit spending as deficit spending. So they’re basically going to be able to say I mean, it’s just basically an accounting trick that says, “Oh, we’re going to have to issue $4 trillion of debt to cover these tax cuts, but by some magic wand it’s not going to add to the national debt.” That is not going to please the raters. Uh S&P also referred to the Trump tariffs, uncertainty because caused by his migration uh policies, trying to deport migrants and just pointing out, uh you know, the US debt situation just continues to deteriorate. Uh S&P first cut the US credit rating back in 2011. Uh back then, the national debt was only $15 trillion and debt as a percentage of GDP was only about 65%. Now, the debt is more than double, it’s $36 trillion, and debt as a percentage of GDP is 100%. It’s only going up and it just seems like another downgrade is inevitable.
02:59 Josh
Rick, good to see you, my friend. Thanks for joining us.
03:03 Rick
Amen.