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The thing you're missing is that government debt has an automatic expiry date to it, for example 10 years. So the question is, if I lend the US government my mo
by dageshi 8y ago
The thing you're missing is that government debt has an automatic expiry date to it, for example 10 years. So the question is, if I lend the US government my money for 10 years am I more or less likely to get it all back than if I lent it to a third world nation?
With the US gov whether the republicans or the democrats are in power I can reasonably assume I'll get my money back, can I say the same about the various political parties in a third world country were they to be elected?
The AAA/AAB style ratings are simply estimates of that reality.