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US May Lose Its 'AAA' Rating
- carterschonwald 18y agothe end of the article makes this sound more like a politically inspired statement than an economic one.
- ars 18y agoGarbage article. It's a slow down, but it's hardly a collapse. Have some perspective please. And the US debt level is not the big when you compare to other countries. And recalling troops isn't going to help much. The money you give to soldiers gets put back into the economy anyway. If the US really was worried about it's debt load, it would just inflate it into nothing. No need for bankruptcy. That's an interesting form of tax: instead of direct tax, just borrow money and inflate it. You can keep doing that forever, and no one ever has to pay tax.
- nradov 18y agoWhen the debt burden becomes onerous I expect the government to default rather than inflate. High inflation would create far more problems in the domestic economy. There is precedent for a country defaulting on debt denominated in it's own currency. Russia did that in 1998 (although it was also accompanied by high inflation). They managed to recover reasonably well afterward. Eventually the USA will probably force its debtors to accept a cram down, with bonds still retaining their face value but a drastic decrease in interest payments and an extension in the repayment period.
- charlesju 18y agoRatings are relative to the rest of the world, currently, while the US is doing really really bad, everyone is doing much worse.
- josefresco 18y agoFrom another article... "Hennecke's stock allocations are mainly Asian-based, especially in the Chinese market as the country's government has a large amount of cash and the macroeconomics are fundamentally strong."