Moody's has downgraded the United States' credit rating from Aaa to Aa1, primarily due to the rising national debt and the lack of effective government spending reduction plans. The agency expressed skepticism about the current fiscal proposals, predicting larger deficits in the coming decade as entitlement spending increases without significant revenue growth. Despite the downgrade, Moody's retains a positive long-term outlook for the U.S. economy, citing strengths such as its robust economy and the dollar's status. The announcement sparked mixed reactions among investors, with some questioning Moody's credibility based on past assessments, while others dismissed the downgrade as inconsequential. As U.S. government debt exceeded $36 trillion, declining investor confidence has led to rising bond yields, creating a cycle that could heighten the debt burden further.

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