U.S. debt downgraded.

 U.S. LOSES AAA RATING

INTEREST RATES TO RISE

On Friday Moody's rating agency dropped the AAA rating of U.S. debt. It was the fourth and final rating agency to lower the credit worthiness of U.S. debt. The first was in 2011. This will result in a lowering of U.S. treasury prices and a rise in interest rates. It will also add to the cost to service the massive U.S. debt and add to the deficit. It has the risk of setting off a debt crisis spiral with further downgrades and increased cost of servicing the debt.

The proposed budget for the next year, estimated at $6.8 trillion, did cut $163 Billion in discretionary spending, but added most of that to the proposed defense spending budget of $1.1 trillion. The 2026 budget is expected to remain flat with a deficit of $1.7 Trillion. That translates to 25% of the budget in added debt. The proposals are too little too late to remedy the future of the dollar and the ability of the U.S. to sustain its spending and servicing its debt.

The big blowout this year is the huge increase in defense spending, dwarfing the defense spending of the combined spending of all industrial countries. China spent $314 Billion in 2024 and Russia $149 billion in 2024. While it may be more for 2026 it is no where near the budget of the U.S.. Many expected an audit of the U.S. defense industry, but it looks like it is not going to happen. Just another $150 billion in spending with no accountability. A unsustainable policy that may be the biggest threat to the United States. Our fiscal irresponsibility is a greater threat to this country than Russia and China.

The budgets of both China and Russia would most likely be lower if not for the threats and trash talking engaged in by US. administrations for decades. 

The U.S has 750 bases in over 100 counties, the Russians and Chinese maybe a dozen. Much of this defense spending is paid to foreign countries in the maintenance of these bases and bribes paid to keep them there. Military personnel numbers are the lowest in modern history. U.S. military numbers haves declined 36% since 1980. 

How is it that Russia has been able to produce munitions above the levels of the combined levels of the U.S. and NATO with a budget of near $150 billion. How is it that no one in congress or the media has yet to ask that question?

I suspect that the dependence on U.S. government spending by a an ever increasing number of Americans will not be remedied, but will only be addressed when it all collapses. Congress needs to become responsible, not enablers of this addiction to government spending.