Thanks to the super committee’s super failure, Fitch Ratings has downgraded US debt outlook to negative. Fitch did not lower the US’ AAA rating for long-term treasuries, but a Fitch official says a negative debt outlook often leads to such a downgrade. That decision is not expected until late 2013, CBS News reports. “We didn't expect that the committee would be able to resolve the budget problem in one single go, but we had believed it was possible for the committee to provide a platform for developing a consensus on how to reduce the deficit,” he says.
“The whole emphasis on trying to bring the budget deficit down now is on discretionary spending,” he continues. “We don't think ultimately that is credible.” The ratings agency also predicts next year will be a rough one for the economy, but growth will increase in 2013. When it comes to federal debt, Fitch estimates that by the end of the decade it will rise above 90% of GDP. When including state and local debts, it will be more than 110% of GDP, which is “not sustainable,” the official says.