Lots of people in this thread failing to understand why the US has a higher credit rating. The US has had a stable political system for 200+ years (leaving asid

Lots of people in this thread failing to understand why the US has a higher credit rating. The US has had a stable political system for 200+ years (leaving aside the Civil War), and has a court and political system that investors have confidence in can respond to financial crises. It's not even about the US government's assets which it could sell, it's about the awesome ability of the US government to raise revenues by raising taxes. For example, US taxes as as a percentage of GDP have mostly fluctuated between a ~22-17% window. Right now, they're at 17%. They were almost 20% during WW2. That 3% respresents a half-trillion of revenue it could collect per year. Current US interest payments are $266 billion per year. There is ZERO chance of a default and everyone knows it. The situation with China is way more opaque. No one knows what their long term ability is to make continuing payments, nor does anyone know if what would happen to their political stability if there were a financial crisis. And as a last resort, since most world debt and trade is conducted in US dollars, the US government can literally print money to settle its debts, both domestic and international. If US tax receipts went to 25% of GDP, that's $1.4 trillion per year of interest payments, or paying off the debt in less than 20 years. Now, the common response would be to claim that raising taxes would reduce GDP growth, but the data doesn't show a strong correlation (higher growth has occurred during times of higher taxes and vice versa) and in any case, it's a lagging signal. All in all, US fundamentals are reasonably good, and the country is well equipped to deal with its debt relative to other aging social democracies. Moreover, if the Trumpsters don't screw up immigration with their xenophobia, the US fertility rate and immigration rate protect it against the kind of demographic inversion you seeing in other countries which poses a huge problem for entitlements. I have optimism for China's long term outlook, but there's way too many unknowns from lack of transparency to trust investing money in it.