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
1) Whole world trades in dollars. As long as dollar is reserve currency, US will never default, b/c dollars will always be in demand.
2) Backed by largest economy & military & world, hence stability.
When you can print the money at little to no cost it is hard to run into a situation where you don’t have money to repay since you have the ability to make more.
It would be very different if the US didn’t control the reserve currency. Since we do our credit rating is always going to be great.
The moment the US loses reserve status we are getting downgraded again but probably much further. The US has a very high debt to GDP.
When you can print the money at little to no cost it is hard to run into a situation where you don’t have money to repay since you have the ability to make more.
It would be very different if the US didn’t control the reserve currency. Since we do our credit rating is always going to be great.
The moment the US loses reserve status we are getting downgraded again but probably much further. The US has a very high debt to GDP.
When you can print the money at little to no cost it is hard to run into a situation where you don’t have money to repay since you have the ability to make more.
It would be very different if the US didn’t control the reserve currency. Since we do our credit rating is always going to be great.
The moment the US loses reserve status we are getting downgraded again but probably much further. The US has a very high debt to GDP.
A borrower’s credit is best if they borrow a lot and pay it back, which the US does. Not paying back damages credit while not borrowing prevents credit from growing.
A borrower’s credit is best if they borrow a lot and pay it back, which the US does. Not paying back damages credit while not borrowing prevents credit from growing.
A borrower’s credit is best if they borrow a lot and pay it back, which the US does. Not paying back damages credit while not borrowing prevents credit from growing.
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