4 ms·
The consequences of a downgrade are TERRIBLE : So much of modern finance relies on Treasuries being AAA to act as some kind of bed-rock. Just like your idea of
by mdda 15y ago
The consequences of a downgrade are TERRIBLE : So much of modern finance relies on Treasuries being AAA to act as some kind of bed-rock.
Just like your idea of 'precisely no risk' of default, what would happen if the programming constant ZERO was only guaranteed to be close to 0? And not really a constant?
- anonymoushn 15y agoI said that there was no risk of sovereign default. Our tax revenue exceeds the cost of our debt service by a factor of more than 10. Do you anticipate that our blended interest rate will increase by a factor of 10 in the near future? We would certainly run a great risk of downgrade (but not of default) if we raise the debt ceiling without making any significant effort to lower our deficit going forward. This seems to be the plan of our politicians, however.