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Why does the US have a AAA rating in the first place? It owes more than its GDP in debt repayments. If I owed more on my credit card than my yearly salary, I do

Why does the US have a AAA rating in the first place? It owes more than its GDP in debt repayments. If I owed more on my credit card than my yearly salary, I doubt I'd have a AAA credit rating. https://tradingeconomics.com/united-states/government-debt-to-gdp https://tradingeconomics.com/united-states/government-debt-t...

dragonwriter 4y ago
> Why does the US have a AAA rating in the first place? Because the US has both historically demonstrated will and irrefutable capacity to pay its debt. > It owes more than its GDP in debt repayments So? > If I owed more on my credit card than my yearly salary, I doubt I'd have a AAA credit rating. If you could control the supply of currency your debt was denonminated in, you would (heck, if even without that, if much of your existing credit card debt had negative real interest rates, you might be, but you probably can’t get that for your credit card debt.) The risk of monetization of the debt adversely impacts the value of the dollar, but not ratings of the US reliability in paying its debts, which are overwhelmingly dollar denominated. Literally, the only significant risk to US debt payments is political fights over the debt ceiling.
- Normille 4y ago
  >Because the US has both historically demonstrated will and irrefutable capacity to pay its debt... 'will' hardly comes into it. It hardly matters if I'm 'willing' to pay my debts, if I don't actually have the money to do so. And if the US has 'irrefutable capacity' to pay its debts, how come the debt keeps increasing, instead of decreasing? At the end of the day, the entire western capitlist system is a huge house of cards. which would collapse if all the debts were ever called in. But, since the US is the driver of said sytem, the world turns a blind eye to the fact that, if the US was a person, it would be bankrupt. Instead, --like someone living beyond their means but buying a lottery ticket every weekend-- they just keep on printing more dollars and borrowing more money, in some kind of vague expectation that 'something' will sort it all out in the end. And these people have the gall to point the finger at cryptocurrencies and label them a 'Ponzi scheme'
- dllthomas 4y ago
  > Literally, the only significant risk to US debt payments is political fights over the debt ceiling. And TBH even that shouldn't be a worry. The debt ceiling is just a law. If it means we don't pay what we owe, it's an unconstitutional law. ... which isn't to say it's an entirely unrealistic worry.

dragonwriter 4y ago

> Why does the US have a AAA rating in the first place? Because the US has both historically demonstrated will and irrefutable capacity to pay its debt. > It owes more than its GDP in debt repayments So? > If I owed more on my credit card than my yearly salary, I doubt I'd have a AAA credit rating. If you could control the supply of currency your debt was denonminated in, you would (heck, if even without that, if much of your existing credit card debt had negative real interest rates, you might be, but you probably can’t get that for your credit card debt.) The risk of monetization of the debt adversely impacts the value of the dollar, but not ratings of the US reliability in paying its debts, which are overwhelmingly dollar denominated. Literally, the only significant risk to US debt payments is political fights over the debt ceiling.

Normille 4y ago
>Because the US has both historically demonstrated will and irrefutable capacity to pay its debt... 'will' hardly comes into it. It hardly matters if I'm 'willing' to pay my debts, if I don't actually have the money to do so. And if the US has 'irrefutable capacity' to pay its debts, how come the debt keeps increasing, instead of decreasing? At the end of the day, the entire western capitlist system is a huge house of cards. which would collapse if all the debts were ever called in. But, since the US is the driver of said sytem, the world turns a blind eye to the fact that, if the US was a person, it would be bankrupt. Instead, --like someone living beyond their means but buying a lottery ticket every weekend-- they just keep on printing more dollars and borrowing more money, in some kind of vague expectation that 'something' will sort it all out in the end. And these people have the gall to point the finger at cryptocurrencies and label them a 'Ponzi scheme'
dllthomas 4y ago
> Literally, the only significant risk to US debt payments is political fights over the debt ceiling. And TBH even that shouldn't be a worry. The debt ceiling is just a law. If it means we don't pay what we owe, it's an unconstitutional law. ... which isn't to say it's an entirely unrealistic worry.