Chamath Palihapitiya Recalls What Happened When US Last Got A Credit Downgrade: 'Absolutely F**king Nothi
President Joe Biden and House Republicans reached an agreement over the weekend to suspend the debt ceiling limit for two years. The safe passage of the bill through Congress is clouded with uncertainty as conservative GOP members have expressed their unhappiness over it.
Last week, rating agency Moody's warned of putting the U.S.'s "AAA" credit rating on "negative" watch in the eventuality of the U.S. defaulting without a debt deal.
Chamath Palihapitiya, a Sri Lankan-born Canadian-American venture capitalist and SPAC sponsor, weighed on the threat of a rating downgrade and the potential implication.
What Happened: Palihapitiya suggested in an episode of the AII-In podcast aired on Friday that a credit rating downgrade may not mean much for the economy. He noted that Standard & Poor downgraded the credit rating of the U.S. from "AAA" to "AA+" in August 2011.
"You know what happened? Absolutely f***king nothing," he said.
These downgrades don't mean much, Palihapitiya said, adding that these third-party credit agencies are not particularly that accurate and sophisticated.