CEO PLAYBOOK

TL/DR (aka “Just give me the good stuff”)

• U.S. just lost its perfect credit rating

• Debt’s growing faster than income

• Mortgage and loan rates won’t drop anytime soon

• Businesses will feel the pinch

• It’s a warning, not a disaster (so CTFO)

Top 10: What This Downgrade Actually Means

1. The U.S Just Got bumped down a notch

• Moody’s lowered the U.S. credit rating from Aaa to Aa1.

• That’s still a strong grade, just not the gold star anymore.

• It’s like going from an A+ to an A. Still good, but people start wondering what went wrong. Oof.

2. A country’s credit score works like yours

• Lenders use it to decide how risky it is to lend money.

• Simple: Lower score means higher interest... meaning, 'lil more risky.

• The U.S. now has to pay a bit more to borrow. And that, of course, trickles down to the rest of us.

3. We’ve been spending more than we earn

• For years, the government has run big deficits. (Meaning: our spending > our income from taxes etc.)

• That means more debt, and a bigger tab to cover interest.

• The debt’s expected to hit 134% of the economy by 2035. That’s like making $100 and owing $134. (People will politicize this, but conceptually this is what this means when you reference it to GDP)

• It's not about one bad year. It's about a long-term pattern we haven’t fixed. Hope we fix this sooooon.

4. Interest costs are eating the budget

• Imagine your budget is so tight that you can’t buy groceries because all your money goes to credit card interest. That’s where we’re headed.

• Soon, the government might spend more on interest than on the military or schools. Thats no bueno.

• Every extra dollar toward interest is a dollar not going to stuff that actually improves life in 'Merica.

5. Borrowing gets more expensive for everyone

• Mortgage rates, car loans, student loans... they often follow what the government pays to borrow money.

• If Uncle Sam’s rate goes up, so do ours.

• You know that 7% mortgage rate that you thought was unreasonable. Sorry, it might stick around longer than you hoped. I have to re-fi some deals too. Sucks.

6. If you’re running a business, expect tighter money

• Banks don’t like risk when things get shaky.

• That means fewer loans, higher interest, and more hoops to jump through. Like the original process was not painful enough.

• Startups and small businesses with lots of debt or no profits will probably feel this first.

7. The rest of the world is watching

• U.S. debt is like the backbone of global finance. If investors start second-guessing it, that shakes up everything.

• Less trust in the U.S. means less demand for our dollars. That could drive prices up on imports or make it harder to raise money.

• Losing a little shine on your “safe and stable” badge can have long-term consequences.

• Don't fret, we are still the cutest gal at prom (all hail to prom season)

8. This is a flashing yellow light, not a red one

• The U.S. still has a strong rating, and the economy isn’t collapsing.

• But this is the third downgrade since 2011. Moody’s just caught up with Fitch and S&P.

• These warnings don’t mean things are falling apart today. They mean we’re not on the best path for tomorrow. Sooo, again, hope we fix it. But it's hard.

9. Political fights aren’t helping

• Moody’s pointed to years of budget battles and short-term fixes.

• It’s not about one side or the other. It’s about kicking the can down the road over and over. There is a current bill in Congress. Its meh but it's hard to get bi-partisan support on tough issues like this. So we will compromise again and call it a win. Sigh.

• While nobody likes to hear this, America is powered by investors. And Investors don’t like chaos. They want signs that there’s a plan... and we haven’t shown them (a decent) one, yet.

10. Yes, this hits you too

• If the government pays more to borrow, it might raise taxes, cut services, or both.

• Your credit card rate... could edge higher. That business loan... could be more expensive. Those college loans... same deal.

• It’s not just a headline. It’s a chain reaction, and it’s already in motion.

I am writing this so that you don't stick your head in the sand. You can't predict what's going to happen but you can prepare, even just a little. I hope this helps.