This is the Cato Daily Podcast for Thursday, August 3rd, 2003.

I'm Caleb Brown.

U.S. credit isn't what it used to be.

Now for the second time, a major credit rating agency has

downgraded US debt. And while there's not much evidence that

lawmakers in charge of federal purse strings will change their

spendy behavior, there is growing agreement that one way to weather the

political storm that might emerge from voting for spending restraint is to

create a brack-like commission aimed at stabilizing U.S. debt.

Cato's Romineavachia explains. Commission aimed at stabilizing US debt.

Cato's Romina Bache explains.

This is, as you said, this is the second time in US history that one of the three major

credit rating agencies has downgraded the US debt.

The downgrade itself is fairly modest going from AAA, which is the highest possible

rating attainable to AA plus.

So even with this downgrade, Fitch is still saying that the United States has very strong capacity

to meet its financial commitments, but they are signaling that they do have concerns on three fronts.

One, the huge accumulation in additional deficits projected over the next three years and beyond.

And the governance issues, as they describe it, basically a lack of confidence that U.S. politicians in the budget process

are capable of handling upcoming budget deadlines in a reasonable way and more importantly

addressing the unsustainable growth in US spending in debt in the future.

One big way to think about this is you know these rating agencies do

...