Standard & Poor's and other credit ratings agencies are "dead wrong" when they warn of the possibility of the U.S. defaulting on its debt, says Jay Feuerstein, chief executive officer of investment company 2100 Xenon.
Rating agencies are concerned over the size of U.S. government debt levels, especially now that it has broken a $14.3 trillion debt ceiling.
Default is not going to happen, Feuerstein says, pointing out that low interest rates make it easier to carry the debt load.
"In 1988, the average interest cost of a dollar of U.S. Treasury debt was a whopping 9 percent. Today, it is a mere 2 percent," Feuerstein tells CNBC.
Interest expense was roughly 4.23 percent of gross domestic product back then, but has fallen to 2.8 percent today.
Standard and Poor's has said the country's AAA rating stands a 1 in 3 chance of being cut in the next two years, a statement Feuerstein says is designed to precipitate a crisis rather than miss one.
"We all know that leading up to the global financial crisis, ratings agencies such as Moody's and S&P issued troves of AAA ratings to structured debt products which ultimately turned out to be worthless," Feuerstein says.
"S&P missed the mark then and is now trying to redeem itself."
Fitch became the latest ratings agency to warn over U.S. default.
"Default by the world's largest borrower and issuer of the pre-eminent reserve currency would be extraordinary and threaten the still fragile financial stability in the U.S. and the world as a whole, especially against the backdrop of the European sovereign debt crisis," says David Riley, head of Sovereign Ratings at Fitch, in a statement.
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