Why is the US’ credit rating so exceptional despite the amount of debt it takes on?

Question

I’m a United States citizen. Moody gives the US a AA+ credit rating (it was downgraded from AAA in 2011).

How can this be, despite the substantial amount of debt the US holds that only continues to grow?

Is it GDP, defense capabilities, the dollar being the de facto currency almost worldwide? A combination of these? Or is there another huge factor(s) I am missing?

In: 54

Answer 1

Thinking of it as debt is a bit of a fallacy. We issue our own currency. The government puts that money into the economy in several ways with bond ‘debt’ being one of them, spending ‘debt’ as another (that is spending above revenue). But that ‘debt’ is simply money that the government put into the economy and didn’t tax back. It’s not the kind of debt we experience at the kitchen table or corporate accounting office level and the rating services understand that.