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Lawmakers express outrage over surprise Fitch decision on August 2, 2023 at 7:58 pm Business News | The Hill

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The move by market agency Fitch Ratings to downgrade the United States’s debt rating has startled lawmakers and policymakers alike, who said Wednesday that they were perplexed by the move amid strong recent economic indicators.

In addition, news Wednesday that U.S. political instability reflected in the Jan. 6, 2021, insurrection at the Capitol was a factor in the downgrading has further confused the Beltway, which was already reeling from a third indictment of former President Trump.

Fitch downgraded its issuer default rating for the U.S. on Tuesday evening, surprising investors, roiling equity markets and sending bond yields higher Wednesday morning. 

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Treasury Secretary Janet Yellen was also vocal about the move by Fitch Ratings, slamming it on Wednesday as “flawed” and “entirely unwarranted.”

“Fitch’s decision is puzzling in light of the economic strength we see in the United States,” Yellen said in prepared remarks. “[The U.S.] remains the world’s largest, most dynamic, and most innovative economy — with the strongest financial system in the world.”

The agency cited the “erosion of governance” and “fiscal deterioration over the next three years” as reasons for the downgrade, also mentioning the debt ceiling default that nearly crashed the U.S. and global economy in June.

“You have the debt ceiling, you have Jan. 6. Clearly, if you look at polarization with both parties … the Democrats have gone further left and Republicans further right, so the middle is kind of falling apart basically,” Richard Francis, a senior director at Fitch, told Reuters.

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White House perplexed

The downgrade is being met with criticism from both parties, who don’t seem to be shying away from pointed partisan rhetoric despite the assessment of increasing polarization.

“We strongly disagree with this decision. The ratings model used by Fitch declined under President Trump and then improved under President Biden,” White House press secretary Karine Jean-Pierre said in a Tuesday statement.

“It’s clear that extremism by Republican officials — from cheerleading default, to undermining governance and democracy, to seeking to extend deficit-busting tax giveaways for the wealthy and corporations — is a continued threat to our economy,” she said.

“The United States faces serious long-run fiscal challenges. But the decision of a credit rating agency today, as the economy looks stronger than expected, to downgrade the United States is bizarre and inept,” posted former Treasury Secretary Larry Summers on X, the platform formerly known as Twitter.

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Conservative Republicans outraged

Rep. Blaine Luetkemeyer (R-Mo.) said in a Wednesday statement he had concerns about “Fitch’s history of subjective ratings” but also went after Democrats’ spending that he called “reckless.”

“Reckless fiscal policy that caused the inflation we’re still suffering is also harming confidence in our currency and treasuries. House Republicans understood this truth which is the reason Speaker [Kevin McCarthy] made countless attempts to start a dialogue with the White House months before the debt limit was reached,” Luetkemeyer said.

Other GOP members said that Biden’s recent legislative decisions were key in pushing Fitch into deciding the government could not work together.

“When Fitch specifically cited the problem of ‘last-minute’ resolutions, they may as well have noted Biden’s refusal to negotiate with Republicans for months, while insisting on even more wasteful spending,” House Ways and Means Committee Chairman Jason Smith (R-Mo.) said on Fox News on Tuesday.

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“President Biden’s brinksmanship — not to mention the $10 trillion in new spending he and Washington Democrats passed over the past two years — pushed America’s credit rating off the ledge,” Smith said.

“Now families and small businesses already dealing with soaring interest rates and lost wages from Biden’s inflation crisis will also have to face the consequences of a reduced confidence in America’s sovereign debt.”

Yellen says she didn’t understand the move

Yellen reiterated that the new Fitch rating “does not change what all of us already know: that Treasury securities remain the world’s preeminent safe and liquid asset, and that the American economy is fundamentally strong.”

The White House may be working on a proposal following the creation by Biden of a working group in July to look at ways to minimize debt ceiling brinkmanship.

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Interest groups in Washington have welcomed the working group’s efforts.

“President Biden should be commended for making reform of our broken debt limit process a priority,” Shai Akabas, executive director of economic policy with the Bipartisan Policy Center, a Washington think tank, said in a statement last month. 

“We urge him to work with congressional leaders from both parties on reform that will avoid the kind of brinkmanship we experienced earlier this year,” he wrote.

​Business, News, 2024 presidential election, debt ceiling, Fitch The move by market agency Fitch Ratings to downgrade the United States’s debt rating has startled lawmakers and policymakers alike, who said Wednesday that they were perplexed by the move amid strong recent economic indicators. In addition, news Wednesday that U.S. political instability reflected in the Jan. 6, 2021, insurrection at the Capitol was a…  

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6 Essential Productivity Hacks for Entrepreneurs

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Are you tired of feeling like your business is stuck in neutral? Well, buckle up, because we are about to share six secrets to help you shift into high gear and leave the competition in the dust.

1. Set Goals That Don’t Suck
Ditch those vague, lofty goals and get specific. What do you want to achieve? How are you going to do it? Write it down, make it happen.
  • Actionable Step: Write a goal that’s so specific, it’s almost boring. Then, create a task list that’s so detailed, you’ll wonder how you ever managed without it.
2. Prioritize Like a Boss
Use the Eisenhower Matrix to sort tasks into urgent vs. important. Focus on the stuff that’ll make a real impact, and delegate or eliminate the rest.
  • Actionable Step: Use a task management tool like Trello or Asana to prioritize tasks. Then, focus on the high-priority ones first, and delegate the rest to your team (or your cat, if that’s who you’re working with).
3. Leverage Tech to Your Advantage
Ditch the paper and pen, and get with the times. Use project management tools, accounting software, and marketing automation platforms to streamline processes and boost efficiency.
  • Actionable Step: Explore tools like Trello, Asana, or ClickUp. Integrate them with your accounting software (like QuickBooks) and marketing automation platforms (like Mailchimp). Then, sit back and watch your productivity soar.

4. Delegate Like a Pro
Don’t be a control freak (unless that’s your thing, in which case, carry on). Delegate tasks to your team, or outsource them to freelancers or agencies.
  • Actionable Step: Identify tasks that can be delegated or outsourced. Then, assign them to your team, or hire a freelancer/agency to do them for you. Voila! More free time for you.
5. Optimize Processes, Eliminate Waste
Analyze your processes, eliminate the waste, and implement efficient systems for tasks like customer service, inventory management, and marketing.
  • Actionable Step: Identify inefficient processes. Optimize them, and implement new systems to enhance productivity. Then, sit back and watch your business thrive.
6. Prioritize Self-Care (Because You’re Not a Robot)
Don’t neglect your physical and mental well-being. Schedule time for exercise, meditation, and self-care to maintain peak performance.
  • Actionable Step: Schedule a daily self-care session. Use it for exercise, meditation, or reading. Then, wonder how you ever managed without it.
So, there you have it – six strategies to help you boost productivity and efficiency in your small business. We hope you find this helpful!

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Saudi Arabia Says ‘Thank You, Next’ to the US Dollar

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Saudi Arabia is reportedly considering abandoning the US dollar for oil trade settlements, a move that could shake the foundations of the global financial system. For decades, the petrodollar system has propped up the dollar’s status as the world’s reserve currency, with Saudi Arabia insisting on dollar payments for its vast oil exports.

However, recent comments from Saudi officials hint at exploring alternatives to the dollar amid growing tensions with the US over various geopolitical issues and the rise of economic powerhouses like China.

Implications of a Petrodollar Shift

If Saudi Arabia abandons the petrodollar, the implications could be significant:

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1. Dollar Dominance Eroded: The dollar’s reserve currency status could weaken, potentially leading to a decline in its value.
2. Global Financial Instability: A sudden shift could trigger volatility in global markets as investors adjust portfolios.
3. Geopolitical Realignment: The move could signal Saudi alignment with China and challenge US economic hegemony.

Challenges and Uncertainties

While the prospect is significant, challenges remain:

1. Finding a suitable alternative currency with the dollar’s liquidity and stability.
2. Potential economic disruption for Saudi Arabia and trading partners.
3. Political backlash and strained relations with the US and allies.

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As the world watches, it remains uncertain whether Saudi Arabia’s comments signal a negotiating tactic or a profound shift in the global financial order.

 

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Are Babies the New Luxury Item?

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The declining birth rate is a global phenomenon, but Gen Z’s approach to parenthood is particularly striking. This generation, born between 1997 and 2012, appears to be grappling with the decision to have children in unprecedented ways, raising concerns about a potential “extinction by choice.”

One of the primary factors influencing Gen Z’s hesitancy towards reproduction is the escalating cost of living and financial burdens associated with raising children. According to a Newsweek survey, 53% of Gen Zers aged 18-24 expressed that they would consider having children if the financial burden were lessened. The staggering costs of childcare, education, and basic necessities have made the prospect of parenthood daunting for many young adults.

Like previous generations, Gen Zers are delaying parenthood, with many prioritizing education, career development, and financial stability before starting families. The average age of first-time mothers has risen from 24.9 years in 2000 to 27.1 years in 2020, reflecting this trend. Additionally, changing societal norms and a focus on personal freedom have contributed to a shift in priorities, with some Gen Zers opting for a childfree lifestyle.

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Gen Z’s heightened social awareness and concerns about global issues, such as climate change, political instability, and economic uncertainty, have also played a role in their decision-making process regarding parenthood. Many Gen Zers have expressed reservations about bringing children into an unstable world, further contributing to the declining birth rate.[2]

The lack of comprehensive family-friendly policies, such as affordable childcare, paid family leave, and workplace flexibility, has made it challenging for Gen Z mothers to balance work and family life. According to reports, Gen Z mothers are 2.5 times less likely than Millennial moms to have job flexibility and half as likely to have paid maternity leave.

While the declining birth rate among Gen Z is a complex issue with multiple contributing factors, addressing financial concerns, promoting work-life balance, and implementing family-friendly policies may help encourage sustainable population growth in the future. However, if the current trends persist, Gen Z’s hesitancy towards reproduction could have far-reaching implications for the future of societies and economies worldwide.

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