Fitch to U.S.: This Is No Way to Run AAA Country
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Oct. 16 (Bloomberg) -- One week ago, when it looked as if adeal to reopen the U.S. government and raise the debt ceilingwas at hand, financial markets were ecstatic. The Dow JonesIndustrial Average had its best day in nine months, rising 323points, or 2.2 percent. Why the euphoria?
The quick answer is, anything that reduces the risk ofdefault is a big plus. Most analysts, including those at thecredit-rating companies, expect the Treasury to make timelypayments of principal and interest because the consequences of adefault would be so dire. And only a handful of individuals --mostly Republicans in the House of Representatives -- seemwilling to test the government’s claim that it has no ability toprioritize debt over nondebt payments.