> "At this time, it appears that meaningful tariff revenue has the potential to offset the deficit-raising aspects of the recent budget legislation."
Assuming this is true, which it may not be given that the deficit (not debt…) continues to rise despite the tariff revenues, it basically points to the fact that the US is cutting taxes on the richest and funding it with a federal sales tax on all.
If by "all" you mean "import companies", yes. While it is true that taxing companies is "passed on" to consumers, it's not an excuse to not tax companies.
I’m surprised they didn’t lower it given the attempts to politicize the fed and the firing of the BLS chief. Also this is quite a short term outlook. Tariffs are likely to cause a stagflationary scenario which could lower government revenue in the long term.
It does make you wonder what would cause a downgrade. The debates over the debt ceiling have certainly brought the U.S. closer to default than I would ever have thought. It's true that the U.S. can never run out of dollars, so in once sense it's not possible for a bondholder not to get paid back. But the political environment, the potential unreliability of previously iron-clad data, economic disruption from tariffs, and behavior from the Federal Reserve, these all seem to make an unlikely event much more likely.
US government debt ratings by US rating agencies are now a bit of a joke. We saw what happened when a minor comedian made a joke adjacent to Charlie Kirk - that joke was, at worst, bad taste, in the context of the tragic and unjustifiable murder. Trump personally tried to destroy that guy.
What happens to rating agencies that dare cut US ratings? Surely nothing good. So they will keep saying things are good - either because they are, or because they aren't, but they cannot say.
But then of course ratings, especially of sovereign debt, are kind of meaningless anyway. The ratings agencies don't have any extra information or deeper analysis available. They know as much as a basic investor, but have no upside in being smarter. The ratings revisions are always reactive, and only really matter because plenty of investors have to avoid bonds below a certain grade.
So it's a demeaning of a meaningless number perhaps.
The tarrifs may be ruled unconstitutional in November and the bond market might react abruptly if the US has to pay back much of the 150 billion or so collected from tariff payers so far. The Supreme Court hears the case on November 6th. If the tarrifs are a reason to maintain the bond rating, their sudden removal and the requirement to pay them back will be semi-catastrophic depending on who you ask. Lutnick laughs at the idea when pressed on CNBC, while Trump says it would be catastrophic for the country. (Lutnick claims to be out of the market but has said that Cantor-Fitzgerald has a “shit ton” of bitcoin, which could explain that divergence of sentiment regarding the upcoming hearing.)
Ha? I read that S&P has maintained the same rating for the USA since 2011. Nothing has changed. Is this what you mean, "nothing happens" was inevitable given the tariffs? Do I misunderstand the article?
As someone not very educated in economics and the institutions around global nation-state economics specifically, what does this mean? It’s more expensive for the state to borrow? From where?
Are there real consequences of this for powerful people, or will they just be passed solely to middle class and below somehow.
In this case S&P just re-affirmed their rating so for now not much, hence the line in the article "There was no reaction in markets on Tuesday to S&P's credit rating affirmation".
> "At this time, it appears that meaningful tariff revenue has the potential to offset the deficit-raising aspects of the recent budget legislation."
Assuming this is true, which it may not be given that the deficit (not debt…) continues to rise despite the tariff revenues, it basically points to the fact that the US is cutting taxes on the richest and funding it with a federal sales tax on all.
If by "all" you mean "import companies", yes. While it is true that taxing companies is "passed on" to consumers, it's not an excuse to not tax companies.
Import companies are part of many supply chains in the USA, that's what the push for globalisation by the USA since the 1990s created.
In a sense it is almost "all", most products Americans consume depend on imported inputs.
In the end the companies aren't taxed, they just pass the cost downwards to the consumer, it's a VAT with many extra steps.
Please explain, I don’t follow.
[dead]
I’m surprised they didn’t lower it given the attempts to politicize the fed and the firing of the BLS chief. Also this is quite a short term outlook. Tariffs are likely to cause a stagflationary scenario which could lower government revenue in the long term.
It does make you wonder what would cause a downgrade. The debates over the debt ceiling have certainly brought the U.S. closer to default than I would ever have thought. It's true that the U.S. can never run out of dollars, so in once sense it's not possible for a bondholder not to get paid back. But the political environment, the potential unreliability of previously iron-clad data, economic disruption from tariffs, and behavior from the Federal Reserve, these all seem to make an unlikely event much more likely.
https://archive.is/20250819182310/https://www.reuters.com/bu...
US government debt ratings by US rating agencies are now a bit of a joke. We saw what happened when a minor comedian made a joke adjacent to Charlie Kirk - that joke was, at worst, bad taste, in the context of the tragic and unjustifiable murder. Trump personally tried to destroy that guy.
What happens to rating agencies that dare cut US ratings? Surely nothing good. So they will keep saying things are good - either because they are, or because they aren't, but they cannot say.
But then of course ratings, especially of sovereign debt, are kind of meaningless anyway. The ratings agencies don't have any extra information or deeper analysis available. They know as much as a basic investor, but have no upside in being smarter. The ratings revisions are always reactive, and only really matter because plenty of investors have to avoid bonds below a certain grade.
So it's a demeaning of a meaningless number perhaps.
glad to see the revenue being recorded
>>August 19, 2025
The tarrifs may be ruled unconstitutional in November and the bond market might react abruptly if the US has to pay back much of the 150 billion or so collected from tariff payers so far. The Supreme Court hears the case on November 6th. If the tarrifs are a reason to maintain the bond rating, their sudden removal and the requirement to pay them back will be semi-catastrophic depending on who you ask. Lutnick laughs at the idea when pressed on CNBC, while Trump says it would be catastrophic for the country. (Lutnick claims to be out of the market but has said that Cantor-Fitzgerald has a “shit ton” of bitcoin, which could explain that divergence of sentiment regarding the upcoming hearing.)
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Ha? I read that S&P has maintained the same rating for the USA since 2011. Nothing has changed. Is this what you mean, "nothing happens" was inevitable given the tariffs? Do I misunderstand the article?
[flagged]
> FAFO
As someone not very educated in economics and the institutions around global nation-state economics specifically, what does this mean? It’s more expensive for the state to borrow? From where?
Are there real consequences of this for powerful people, or will they just be passed solely to middle class and below somehow.
In this case S&P just re-affirmed their rating so for now not much, hence the line in the article "There was no reaction in markets on Tuesday to S&P's credit rating affirmation".