'There is no good news here, zero': Kevin O'Leary issues a dire warning on the downgraded US credit rating — here's what has him so worked up (and who's taking it in stride)

“There is no good news here — zero,” O’Leary said on a recent episode of Fox News’ Sunday Night in America.

Here’s why some business leaders agree with O’Leary, while others are less concerned.

Reasons for the downgrade

On Aug. 1, Fitch Ratings officially lowered the U.S.’s long-term foreign currency issuer default rating from AAA to AA+. To be sure, the new rating is still better than that of most other countries — the U.S. government remains one of the most reliable borrowers in the world — but the downgrade does reflect some concern about the nation’s creditworthiness.

In a news release announcing the move, Fitch said concerns about “a high and growing general government debt burden and the erosion of governance” were among the primary triggers for this downgrade. The agency specifically called out the fact that lawmakers in the U.S. had engaged “in repeated debt limit standoffs and last-minute resolutions" over the past two decades.

Concerns stretch to the future as well. Fitch forecasts “fiscal deterioration over the next three years,” which means the downgrade reflects more pain ahead.

Impact on the economy

"It is a big deal," O’Leary said during his segment on Fox. He argued a lower credit rating, which impacts the U.S. dollar as well as interest rates on loans from other countries, is effectively a negative assessment of the country’s entire economy.

He also expressed concern over America’s role on the world stage, saying a lower credit rating has the potential to shake confidence in the U.S. as a trustworthy borrower and partner.

“If ever the world thinks we're unable to pay our bills and would default on them, that's when it's all over,” he said.