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?
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Because the US, so far, never defaulted on its debt. And because oil is largely traded in dollars so there’s always demand for USD, which means demand for liquid instruments that can be turned into USD at short notice.
Becuase of the nuclear triad and the Navy SEALs. We can assassinate world government and business leaders and we can level entire countries. Push comes to shove, we will just rob the global coffers.
Becuase of the nuclear triad and the Navy SEALs. We can assassinate world government and business leaders and we can level entire countries. Push comes to shove, we will just rob the global coffers.
To add to what others have already said, in case you are thinking the US can choose to miss a debt repayment, doing so would be one of the last measures the govt resorts to. I don’t know how to give you a good sense, but it would be disastrous for the US and world economy if the US ever defaulted on its debt. The US would sooner choose to print more money. This kind of confidence that the US would never elect to default on debt and has backup measures in the unlikely event things get difficult makes govt debt have such a high credit rating.
US government debt has the credit of the US government, which is seen as the most stable (*I know*) in the world, and the backing of the US economy. What’s more, the debt is denominated in US dollars, the world’s reserve currency, and the US prints the money. Therefore, US gov’t debt has zero *credit risk*.
To add to what others have already said, in case you are thinking the US can choose to miss a debt repayment, doing so would be one of the last measures the govt resorts to. I don’t know how to give you a good sense, but it would be disastrous for the US and world economy if the US ever defaulted on its debt. The US would sooner choose to print more money. This kind of confidence that the US would never elect to default on debt and has backup measures in the unlikely event things get difficult makes govt debt have such a high credit rating.
To add to what others have already said, in case you are thinking the US can choose to miss a debt repayment, doing so would be one of the last measures the govt resorts to. I don’t know how to give you a good sense, but it would be disastrous for the US and world economy if the US ever defaulted on its debt. The US would sooner choose to print more money. This kind of confidence that the US would never elect to default on debt and has backup measures in the unlikely event things get difficult makes govt debt have such a high credit rating.
US government debt has the credit of the US government, which is seen as the most stable (*I know*) in the world, and the backing of the US economy. What’s more, the debt is denominated in US dollars, the world’s reserve currency, and the US prints the money. Therefore, US gov’t debt has zero *credit risk*.
US government debt has the credit of the US government, which is seen as the most stable (*I know*) in the world, and the backing of the US economy. What’s more, the debt is denominated in US dollars, the world’s reserve currency, and the US prints the money. Therefore, US gov’t debt has zero *credit risk*.
1) US is good at paying it’s debts.
2) US debt is denominated in US dollars. Whatever happens to the US dollars internationally, 1 dollar still pays off 1 dollar of debt.
3) Historically it see isn’t /that/ large. As I recall Great Britain ran a debt over 200% GDP for over a century.
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