U.S. Loses Last Triple-A Credit Rating

[pooya87]

This was long overdue considering that US economy hasn't been doing well for a very long time. I'd say the main collapse began back in 2008 (which is also when Bitcoin was created to fill the vacancy created by that) and those problems never got fixed. Instead things got worse every year, which can be seen on the increasing US national debt and public debt (I think it is $60 trillion combined).

To put simply the US economy has been a Ponzi scheme and a sinking ship for at least 2 decades and the only reason why such credit ratings remained high were political not actual. Now with political instability and weakening in the US, they can lower to more realistic values...

[BenCodie]

What's to be expected after decades on decades of fiscal irresponsibility from a government where its highest officials are not just idiotic, but corrupt and lobbied by corporate and elitist cronies. Not much of the American government in the last 100 years was about reducing debt, it was about systematically increasing it to make the wealthy wealthier. The rating change from AAA to Aa1 is just the start of what could very well be a collapse comparable to the Roman empire.

[fruktik]

1. I expect this kind of news keep coming. It's just the normal result of his chaotic actions.
2. I also expect that no action is done about them because:
* he "knows better"
* whatever nonsense he delivers is accepted by his supporters
* even if he would provide proper knowledgeable answer (heh), it may not be accepted by many of his opponents

I do agree that US (and the world, pretty much) is going in the wrong direction. But let's also agree that nowadays everything is more biased in politics than ever. It's like the vast majority (of the world population) has lost the ability to think. Or it may only me realizing this rather late and somewhat suddenly.

No and no again. You are definitely not mistaken and I think in the way that should accompany a sane person. The world is going in the wrong direction.

And this Trump is just an idiot who does not know which hand is which. Soon he will not only finish off the country's economy and lead it to bankruptcy, as with his business 6 times, but the country will also lose the opportunity to be on the list of reliable partners. Well, this old man is just a "genius of thought".

[paxmao]

tricky dick started this when he lowered tax rates for the rich below 50%

I dont want to drag out a long argument about this because it should just be a simple point.  The absolute margins of taxation are not as important as the revenue raised and this is very similar across business.

 Â Its almost always about the revenues and scale of business done not the profit margin possible to levy on a 'customer'.   This can be the mistake many make about capitalism in general but its quite ironic that lowering margins, being efficient can be the most productive and profitable route for a business and even government in this case.  

https://www.investopedia.com/terms/l/laffercurve.asp

I believe the 'Laffer curve' tries to describe this idea and might be the simplest thing to quote but it can be true that high taxation rates nets less tax overall.   Especially true in this modern global economy, I have no belief trying to capture the rich man dollar like its fish in a net is the path to balancing the budget etc.
 Â It is a mythical tale unfortunately, it wont be happening in this administration or any other and there is a danger of doing less business then achieving less tax to balance fiscal spending, leading to even more debt for no advantage.

I have seen this curve cited many times. But it is always cited by rich people who do not want to pay more taxes

In my view many countries are simply very lenient when taxing the rich, and very harsh when taxing the middle clases that are less prone to leave the country. The Uk right now has that ongoing debate, but if you ask me about the "non-domiciled" status... it is an absolute bargain for millionaries that has the side effect of raising the price of Real State beyond what is reasonable. Now that is happening in Milan as they flee London.

[Free Market Capitalist]

I have seen this curve cited many times. But it is always cited by rich people who do not want to pay more taxes

In my view many countries are simply very lenient when taxing the rich, and very harsh when taxing the middle clases that are less prone to leave the country. The Uk right now has that ongoing debate, but if you ask me about the "non-domiciled" status... it is an absolute bargain for millionaries that has the side effect of raising the price of Real State beyond what is reasonable. Now that is happening in Milan as they flee London.

I am not surprised that you don't stop to do basic math. If you would stop to do it you would realize that increasing taxes on the richest does not significantly affect the budget, and that is why when governments need money what they do is to increase large taxes such as VAT or personal income tax. Or create more inflation, which is the hidden tax.

Apart from the effect that taxes on capital have on the economy in general, such as reducing investment, expelling talent or discouraging effort.

[mrust_mobile]

I am far from a fan of Trump but neither of you two seem to have taken any notice of what the OP himself has written.

The decision to downgrade debt was influenced by “the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns,” Moody’s said in a statement. Moving forward, Moody’s said it expects borrowing needs to continue to grow and for it to weigh on the US economy as a whole. .

I will illustrate this with a chart of https://fred.stlouisfed.org/series/GFDEBTN



As can be clearly seen, there was a first acceleration of debt with the bursting of the .com bubble, another with the 2007 crisis, and another with the Covid crisis. This with alternating Democrats and Republicans in the White House. So this is not about one president or the other being solely to blame, let's see if we have forgotten which forum we are in. Just take a look at this:

https://www.usdebtclock.org/world-debt-clock.html

I say this about the forum we are in because the forum was created, just like bitcoin against the fiat system scam, in which one party comes along and makes some small changes, and then another comes along and makes others, but they all share the fundamental basis, the destruction of fiat currency by increasing state spending and devaluing the currency with inflation, which many people do not realise is the biggest economic scam perpetrated by the states.

The chart is going parabolic and if I know something about parabolic charts, it is that sooner or later they go to zero because eventually it becomes unsustainable and that’s exactly what we are seeing here.

Trump is visiting the rich middle eastern countries and extracting money from them via deals to delay the demolition but we’ll see if that will be enough.

[takuma sato]

This was long overdue considering that US economy hasn't been doing well for a very long time. I'd say the main collapse began back in 2008 (which is also when Bitcoin was created to fill the vacancy created by that) and those problems never got fixed. Instead things got worse every year, which can be seen on the increasing US national debt and public debt (I think it is $60 trillion combined).

To put simply the US economy has been a Ponzi scheme and a sinking ship for at least 2 decades and the only reason why such credit ratings remained high were political not actual. Now with political instability and weakening in the US, they can lower to more realistic values...

By the time the collapse happened all the usual signs where ignored. This time the market does not car at all that Moody's and co are lowering their ratings on US bonds. Trump administration claims that Moody is a leftist company now, claiming that this is a political move. I find this ridiculous. While they should have done this earlier, the point remains: The debt is getting out of control, the rating is being devalued because we are entering 40T+ territory and with rates going to 5%+ on mortgages we are going to see some civil unrest eventually. Debit and bankruptcies are creeping up, the only thing that remains is unemployment rate. When payrolls decrease then Powell may be forced to paniccut even tho tho inflation may  be on the horizon if Trump continues to not measure properly the tariff strategy.

[goldkingcoiner]

The debt-to-GDP is not going to stabilize anytime soon. When do interest payments begin crowding out essential services and investments? That seems to be the likely next step. No wonder the US needs to keep starting wars while offering "help" at the same time.

What would happen if the U.S. defaulted or the dollar lost reserve currency status?

[Mate2237]

The United States of America has a big credit record to fill because there dept as far as am concerned is one of the worst in the world every country is owning a dept to a large extent so am not really surprised about this news that United States dept profile


One of the countries that use media propaganda in covering up the bad side of their country is the United States and most countries don't know about it I with this trade face-off going on in the trump administration I see the dept profile of the united states of America increasing further higher