chinese

A day after a congressional budget deal that ramps up federal spending and eliminates the ceiling on public debt, China’s premiere rating agency has downgraded the U.S. government’s credit rating.

In marking down Washington’s credit-worthiness, Dagong Global Credit Rating specified that the move was not a response to the 16-day partial government shutdown but to the federal government’s mounting debt and rampant spending. Dagong said the theatrical battle over the partial shutdown merely “highlights the deterioration of the government’s solvency,” revealing a cycle wherein “the debt crisis evolves into a political crisis, which in turn exacerbates the debt crisis.”

It is far from clear how much, or even if, the shutdown made America’s debt situation worse, but Keynesian macro-economists have been busily making far-fetched claims about how the U.S. economy was hurt by a stalemate that temporarily stopped a mere 17 percent of public spending.