US Debt Downgrade: What it Means For You

As you probably know, credit rating agency Standard & Poor recently downgraded the United States’ credit rating from AAA to AA+. S&P also gave the US a negative outlook, which means S&P could downgrade the US again within the next two years to AA+. S&P is not the only rating agency, however. Moody’s and Fitch both left their AAA ratings in tact, but said they might reconsider those ratings at a later date.

But what does this mean to you? Aside from the increased political bickering on TV and in Washington, the downgrade could have some negative side effects for the American consumer.

First, we may see a rise in inflation. This is due in large part to the slowing economy and rising amounts of currency in circulation.

Second, higher taxes might be on the way. As it currently stands, the US receives a very good interest rate on its debt. That could change with our lowered rating. This would mean paying more interest on our debt, which would make our lack of revenue more concerning.

Finally, we may see higher homebuying costs. Fannie Mae, Freddie Mac, and the Federal Housing Administration may see higher interest rates, which may mean higher rates for borrowers in order to balance their increased costs.

It’s unclear yet whether any of these possibilities will occur; however, they are something to keep in mind. Here at Law Office of David M. Goldman we like to keep abreast of the latest political and economic news to impact the Consumer Law field. If you would like to contact a Jacksonville Bankruptcy Attorney to discuss your consumer law issue, call 904-685-1200 today.