On this weekend’s broadcast of “Inside Washington,” Washington Post columnist Charles Krauthammer explained the impact the upcoming presidential election will have on the country’s fiscal situation, particularly its credit rating.
Last August, the United States lost its AAA credit rating from Standard & Poor’s and was downgraded to AA+, after Congress broke a stalemate and agreed to spending cuts that would reduce the debt by over $2 trillion. Krauthammer said the U.S. could suffer another downgrade if President Barack Obama is reelected.
“No, but I think if we reelect Obama, we will have a downgrade, probably a default — something like a default, not a real default,” Krauthammer said. “But we’re going to head that way, obviously, because you can’t sustain trillion dollar deficits as far as the eye can see.”
The Washington Post columnist went on to explain why the debt ceiling fight won’t be the cause of any such downgrade.
“So a downgrade will come, but not over a debt ceiling thing, for the following reason: If Romney wins, this is a moot issue,” he said. “There’s not going to be a showdown. If Obama wins, it’s also a moot issue, because we’re going to be dealing with 18 other issues — the expiration of the Bush tax cuts, of the payroll tax, there’s going to be a tsunami of taxes and an increase in spending, as well. So, that’s going to be a minor issue. I think the reason [House Speaker John] Boehner raised it is to make it an issue. It’s a rhetorical issue. It’s only going to happen after Election Day, so it’s not going to have any effect on the real world.”