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>> That is a very low bar though, any country still functional enough to run a printing press can make coupon payments. This hasn't happened unless you count Q

>> That is a very low bar though, any country still functional enough to run a printing press can make coupon payments. This hasn't happened unless you count QE as printing money to pay debt, which would be a pretty serious twist of logic. >> The issue is, if someone lends the US enough money to buy a coffee, it is difficult to see why they believe they are guaranteed to get a coffee+ worth of money back. >> At this point, a reasonable observer could conclude that the political process is locked in to running up debt until the interest can no longer be paid. Neither the Republicans nor Democrats are in a position to improve the numbers. If you think this is actually true, there is a ton of money to be made on the open markets by securing your position with capital. There's plenty of financial instruments you can leverage to back your position. >> After the '07-'08 era crisis, it seems a legitimate question to ask why the taxpayer should pay their debts if the financiers seem to get a pass when it all gets too hard for them. This is a legitimate criticism but separate from your other claims. QE is protectionist and massively contributes to inequality (in more ways than just income). I am quite critical of the USG and their economic policies. Now I can admit that and also admit that the United States is probably the safest credit risk on the planet, primarily due to the hegemony-driven policies we exert globally. You might argue that this is not for long, but I highly doubt this to be true, and the rest of the world acts as if.

roenxi 8y ago
> This hasn't happened unless you count QE as printing money to pay debt, which would be a pretty serious twist of logic. Credit ratings are forward-looking though. The US's financial position is the worst it has ever been - public debt to GDP is on wartime footing in a long period of peace between major powers. And from my admittedly highly unreliable sources, a number of states aren't in great financial health and there is a pension crisis afoot. The fact that the US is going to hand out the nominal value of its debt is not comforting in light of this. > ... there is a ton of money to be made on the open markets by securing your position with capital That isn't a fair challenge and you know it, there are a lot of ways to lose everything being clever with derivatives even if the macroeconomic assessment is right. Profiting off something isn't the only way to be right about an opinion. > This is a legitimate criticism but separate from your other claims. No it isn't. If the US isn't honoring the capitalist system inside their markets, it is legitimately risky to assume that they will treat foreigners with more respect. There is an argument that they will, but it isn't a sure thing by any stretch. If something does change, by the time everyone admits that it will be far too late for investors. The US is chronically unable to balance its budget. The first thing to give could easily be foreign-owed debt, because foreigners don't vote.
- lotsofpulp 8y ago
  Everything is relative. Even with all the problems in the US, the world has decided that it is still where they should put most of their trust. Also, having the most powerful military means it can do whatever it needs to keep itself going (not that it necessarily will, but it can, so that adds to the trust).

roenxi 8y ago

> This hasn't happened unless you count QE as printing money to pay debt, which would be a pretty serious twist of logic. Credit ratings are forward-looking though. The US's financial position is the worst it has ever been - public debt to GDP is on wartime footing in a long period of peace between major powers. And from my admittedly highly unreliable sources, a number of states aren't in great financial health and there is a pension crisis afoot. The fact that the US is going to hand out the nominal value of its debt is not comforting in light of this. > ... there is a ton of money to be made on the open markets by securing your position with capital That isn't a fair challenge and you know it, there are a lot of ways to lose everything being clever with derivatives even if the macroeconomic assessment is right. Profiting off something isn't the only way to be right about an opinion. > This is a legitimate criticism but separate from your other claims. No it isn't. If the US isn't honoring the capitalist system inside their markets, it is legitimately risky to assume that they will treat foreigners with more respect. There is an argument that they will, but it isn't a sure thing by any stretch. If something does change, by the time everyone admits that it will be far too late for investors. The US is chronically unable to balance its budget. The first thing to give could easily be foreign-owed debt, because foreigners don't vote.

lotsofpulp 8y ago
Everything is relative. Even with all the problems in the US, the world has decided that it is still where they should put most of their trust. Also, having the most powerful military means it can do whatever it needs to keep itself going (not that it necessarily will, but it can, so that adds to the trust).