For over 100 years, the United States held a perfect credit rating — until now.
In a historic move, Moody’s Ratings has stripped the U.S. of its last remaining AAA score, citing out-of-control deficits, surging interest costs and deepening political dysfunction. It’s the final blow in a series of downgrades that now leaves the world’s largest economy without a single perfect credit rating from any major agency.
Moody’s had maintained its AAA rating on U.S. debt since 1917. With this downgrade to Aa1, America joins the ranks of countries with diminished borrowing credibility, following similar actions by S&P in 2011 and Fitch in 2023. But the message this time is louder: even the most enduring fiscal reputation has limits.
The downgrade underscores a growing concern that the U.S. is approaching a breaking point — not in a sudden collapse, but in a slow, steady erosion. As Deutsche Bank’s Jim Reid put it, “We’re somewhere along the line of a ‘death by a thousand cuts’ with regards to the U.S. fiscal situation.”
A Debt Spiral with No Clear Exit
The Moody’s downgrade comes as the U.S. national debt soars past $36.2 trillion, with annual deficits near $2 trillion and rising. Economists and credit agencies alike are warning that economic growth may not keep pace with interest obligations and runaway spending.
Moody’s justified its move by stating: “While we recognize the U.S.’ significant economic and financial strengths, we believe these no longer fully counterbalance the decline in fiscal metrics.”
In May, Treasury Secretary Scott Bessent admitted that the U.S. was on an “unsustainable trajectory,” and warned that a crisis could lead to “a sudden stop in the economy as credit would disappear.”
Meanwhile, the Congressional Budget Office (CBO) estimates public debt could hit a staggering 220% of GDP by 2050 if the 2017 tax cuts are extended without spending reform — 63 percentage points higher than current baseline projections.
While the Trump administration hopes its proposed tax reforms will raise GDP and improve the debt-to-GDP ratio, independent projections — including from the CBO — paint a far more alarming picture.
Political Gridlock Adds to the Uncertainty
At the heart of Moody’s decision is the perception that the U.S. lacks the political will or consensus to change course. With Congress stalled on President Trump’s “One Big Beautiful Bill,” which aims to expand tax cuts while also attempting to rein in spending, even members of the president’s own party are hesitant to move forward over debt concerns.
As UBS strategist Mark Haefele noted, the downgrade may not trigger immediate market turmoil, but it “leans against the recent ‘good news’ momentum” and serves as a growing “headline risk” that investors can’t afford to ignore.
The Case for Gold Has Never Been Clearer
For decades, U.S. Treasuries were considered the ultimate safe haven. Today, that faith is faltering. With America’s credit now downgraded across the board, and debt projections spiraling upward, the case for alternative stores of value has never been more compelling.
Physical gold and silver provide protection that fiat currencies and government bonds cannot. They are not dependent on central banks, Congressional decisions, or ratings agencies. They don’t default or devalue.
“Overall, over the next few months, I think gold is a good safe bet considering the downgrade on the United States,” said Bob Haberkorn, senior market strategist at RJO Futures.
Secure What You’ve Earned as Confidence Wavers
With the U.S. losing its last perfect credit rating and borrowing needs rising faster than its ability to repay, now is the time to reassess your portfolio. At Reagan Gold Group, we help Americans preserve wealth through IRS-approved physical gold and silver IRAs and direct delivery of precious metals. In an environment of soaring debt, inflation risk, and political dysfunction, gold remains one of the few assets you can actually trust.
Book your FREE consultation today!
