It wouldn’t be “the end of the world” if the United States’s credit rating is downgraded, Mark Zandi, chief economist of Moody’s Analytics, said on Good Morning America Wednesday.
The main impact the average consumer would see is higher interest rates, Zandi said, in a separate appearance on CBS’s Early Show. They wouldn’t “rise overwhelmingly,” he said. “But they would rise.”
If the U.S. loses its AAA rating, it may not take long to get it back, he said. The U.S. just has to “do the right thing” and make hard choices to get on a more fiscally sustainable path.
But the nation may not even have to worry about that.
Asked whether it was the state of the economy or Congress’s inability to come together on a deal that was really threatening the credit rating, Zandi said on the Early Show: “The latter. This is just a political decision, right? We are a very large nation. We’re a very prosperous nation. We can pay our bills.”
If Congress raises the debt ceiling by next week and makes “substantive progress towards reducing future budget deficits,” there would be no reason for the United States’s credit to be downgraded, Zandi told hosts of GMA.
“Frankly, I don’t think we’re too far away, that the parties involved are saying much of the same thing, and I think they can come to graceful resolution here,” he said on the Early Show.
“This isn’t written in stone,” Zandi said. “Our future is in our own making. We just have to do it.”