America's debt-addicted government just lost its triple-A credit rating from Moody's, as it previously had from fellow rating agencies S&P and Fitch. Many in Washington shrugged the move off as minor or as unfair treatment of the Trump administration. The truth is more sobering: a flashing red signal that the United States is no longer seen as a "perfect" credit risk and that politicians should stop pretending economic growth alone can bail us out.
Yes, the mess is real, and it's because habitual deficit financing—the very disease fiscally-minded Founding Father Alexander Hamilton warned against—has become business as usual.
The reckoning comes as House Republicans push to extend the 2017 Trump tax cuts with a "big, beautiful bill." If handled correctly, it's a good idea. But while the legislation aims to avoid tax hikes, it pairs modestly pro-growth provisions with a smorgasbord of costly special interest giveaways. Worse, it assumes we can afford yet another $3 trillion to $5 trillion in debt without serious consequences. That's the kind of magical thinking that spurred the credit downgrade.
