- The weaknesses of the US economy, once considered the most viable and strong in the world, are gradually coming out, unemployment has increased.

- Fitch has given three main reasons for the downgrade of America's rating. The first reason is that in the next three years, America is expected to be in a recession on the economic front and the economic condition of America will get worse. Another reason is that America's debt is skyrocketing. The US government is not doing anything to reduce this debt but rather it is increasing the debt. The third reason is that, in the last 20 years, the level of governance in America has been steadily deteriorating. Due to this, America has to continuously increase the debt.

As the credit Rating of America, which is considered the strongest economy in the world, has been reduced by the well-known agency Fitch, there are signs of a big upheaval on the economic front all over the world. At present, the rating of US sovereign, i.e. America as a nation, was triple A, but Fitch has reduced it to double A plus.

Fitch downgraded America's rating did not have any effect on the American stock markets on the first day, but experts are expressing fears that it will have an impact in the future. As the stock market crashes in America, it has an impact on the markets all over the world, so everyone is now worried that the wave of depression will not return to the stock markets of the world.

America is weighed down by this move of Fitch. America says that America completely disagrees with Fitch's rating because Fitch has adopted a model for rating that can make America look down. The fact that America has re-seated itself as one of the world's major economies under President Joe Biden's rule has been ignored.

The American government may say this in its own defense, but Fitch has given three main reasons for the downgrade of the American rating. The first reason is that in the next three years, America is expected to be in a recession on the economic front and the economic condition of America will get worse. Another reason is that America's Debt is skyrocketing. The US government is not doing anything to reduce this debt but rather it is increasing the debt. The third reason is that, in the last 20 years, the level of governance in America has been steadily deteriorating. Due to this, America has to continuously increase the debt.

According to Fitch, the condition of America is also deteriorating on the financial front. Inflation and inflation continue to rise. Interest rates are being hiked to counter this but it has not had much effect. In the United States, the Republican Party and the Democratic Party have reached an agreement not to increase the debt ceiling until January 2025, i.e. for about a year and a half. It is unlikely that this agreement will be followed.

On the other hand, dramas happen every time the debt limit is raised. There is a tug of war between the Democratic Party and the Republican Party. Due to this there is uncertainty till the last minute. As a result, questions have also been raised against the government's ability to manage on the economic front. Secondly, whatever measures the US government takes on the economic front are short- or medium-term. The government has no plan to strengthen the US economy in the long term. Short-term plans are made to win elections. In these circumstances, there is no possibility that America will get stronger economically.

Most economic experts agree with Fitch's findings. He believes that the weaknesses of the American economy, once considered the most viable and strongest in the world, are gradually coming out. Due to this inflation is increasing and unemployment is also increasing. Instead of curbing it, the US government is taking measures to increase populism such as spending increases and tax cuts to win elections easily.

It is obvious that what the economic experts are saying is true, but it is an American question. The main question for countries including India is, what will be the impact of Fitch downgrading America's rating on them? Fitch predicts that the recession will start in America from October and will remain in recession for six months. If the government does not take concrete measures to improve the economic situation in these six months, there may be a crushing recession. America is the largest economy in the world. A recession in America affects all the countries of the world, so there is a danger that the whole world will fall into recession.

Fitch's downgrade has already had an impact on stock markets around the world. The stock market of Asia, Australia, etc., crashed on Wednesday itself. Fitch's downgrade will lead to a withdrawal of foreign investment from US Treasuries. American Treasury means bonds, bills, notes of the American government. Foreign investors invest heavily in TIPS and floating rate notes. This is because the US government is viable and investment in its instruments is considered very safe. This investment is guaranteed to never sink and also get huge returns.

The credit has been hit by the downgrade so there is bound to be some panic among foreign investors. It will also affect the stock markets. Due to this, the American stock markets may have digested the shock at the moment, but it will cause trouble for them in the future. It will have an impact on the stock markets around the world.

In short, the downgrade of America's rating is a sign of a major economic disaster for the world.

Standard & Poor's downgraded 12 years ago

Most of the financial agencies give America the highest i.e. triple A rating. In 2011, Standard & Poor's (S&P) first downgraded America's rating from triple A to double A plus, causing a stir. For the first time in the 70-year history of ratings, America's rating was downgraded, which was also attributed to the rising debt of the United States.

S&P claimed that the agreement between the Republican Party and the Democratic Party to increase the US debt limit has no steps to improve the US economic situation. America needs to plan long-term to keep its debt stable, but it was also commented that America does not think anything in that direction. The S&P report predicted that if America fails to stabilize its debt, the condition of America will deteriorate. Problems including inflation, unemployment will start bothering. This prediction of S&P has come true within a decade.

At that time, the US government threatened to downgrade the rating of S&P and put a lot of pressure on it to change its rating, but S&P did not budge. S&P has not changed its rating for the US since 2011.

America's growth rate will be only 0.5 percent

Fitch has predicted that there will be a mild recession in the US in the last quarter of 2023 i.e. from October to December and the first three months of 2024 from January to March. Due to the continuous increase in interest rates in the US, the number of borrowers has decreased, so the flow of cash in the market has decreased. All inflows to America have also declined. People do not have cash so the consumption of goods has also decreased. Due to this, fear has been expressed that America is being pushed towards recession.

Finch has also predicted that the US economic growth rate was 2.1 percent in 2022, which will decrease to 1.2 percent in 2023 and only 0.5 percent in 2024.