Welcome back to The Breakdown with me, NLW.

It's a daily podcast on Macro, Bitcoin, and the Big Picture Power Shifts remaking our world.

What's going on, guys? It is Monday, May 19th, and today we were talking about a U.S. credit

downgrade. Before we get into that, however, if you are enjoying the breakdown, please go subscribe

to it, give it a rating, give it a review, or if you want to dive deeper into the conversation,

come join us on the Breakers Discord. You can find a link in the show notes or go to bit.ly

slash breakdown pod. All right, friends, well, it has happened. Moody's have downgraded the credit rating of the U.S.

government, citing spiraling annual deficits.

That means that now all three major credit agencies have dropped the rating on U.S. debt below

AAA.

S&P delivered their downgrade in 2011 following the passage of the Budget Control Act. At the time,

they said the fiscal control plan, quote, fall short of what would be necessary to stabilize

the government's medium-term debt dynamics. They also noted weakening effectiveness and stability

in American policymaking and institutions. More recently, Fitch delivered their downgrade in

August of 2023, essentially marking the bottom

of that economic slowdown. They also cited spiraling debt, but focused on a, quote,

steady deterioration in standards of governance over the last 20 years. The agency noted repeated

debt standoffs and zero progress on Social Security and Medicare reform. After the bell on

Friday, Moody's concurred and lowered the credit

rating on U.S. debt from AAA to AA1. In their statement, they wrote, while we recognize

the U.S.'s significant economic and financial strengths, we believe these no longer fully

counterbalanced the decline in fiscal metrics. The White House immediately asserted that this

...