EARLIER this month, Fitch downgraded the United States sovereign credit rating by one notch from the highest AAA to AA+.

This was not entirely unexpected, given that the ratings agency had signalled this possibility earlier in the year, a key factor being political brinksmanship in the repeated stand-offs over the US debt ceiling.

Still, the Fitch downgrade has reignited debates over the growth and sustainability of America’s public debt, notwithstanding US economic heft and its reserve currency status. Meanwhile, public debt continues to rise across the developed world in the wake of pandemic support measures and fiscal stimulus.