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The US has excellent credit because, beginning with Alexander Hamilton, it has never ever cut a payment on debt no matter what crisis it thinks it faces. Treasu
by cjensen 5y ago
The US has excellent credit because, beginning with Alexander Hamilton, it has never ever cut a payment on debt no matter what crisis it thinks it faces. Treasury notes are as good as money because of this.
Keep in mind that debt is a liquid asset. If you were foolish enough to not pay out Chinese debt holders, they would simply sell to Americans. The notion of "lets not pay xyz" has spectacularly bad outcomes because it signals to the world that you are not a serious nation when it comes to debt.
In the long term, the US strategy has clearly paid off.
- chewz 5y ago> The US has excellent credit because, The US has excellent credit because it has largest military and is the dominant global player. That makes money parked in US T-bills safe. Liquidity and good, healthy economy (but not perfect) helps.
- snowwrestler 5y agoThe big military only works in US’s favor because of the US commitment to pay. A country with a reputation for stealing people’s money does not attract foreign investment no matter how big the military. Does a robber seem trustworthy to you just because he’s got a big gun?
- hellbannedguy 5y agoThe world might understand if China gets cute though--with all that iron talk. Maybe the USA is looking for a reason to not pay?