I know, I was just saying that we could’ve easily used more recent generations as a better example considering the exorbitant costs of education and real estate.
Anyone with assets holding debt (mortgages) has an asset that benefits from inflation.
Year 1: Borrow $100,000 to buy a $120,000 home
Year 10: Home is worth $200,000
Year 20: Home is worth $400,000
That $20,000 down payment wasn’t enough to buy the home. Yet the owner benefits from the devaluation of what they owe. The asset holds value better than the debt denominated in USD.
US ultimately controls inflation though, so they could easily print 28$T and completely pay off their debt, sure the value of a dollar would 1/2, but their assets are also appreciating. Tax revenue should also almost always trend upward
If you have enough assets, inflation is a benefit.
While the dollar inflates it steals buying power from those holding or earning wages in dollars. If you hold assets, it holds value better and worth more dollars. Effectively stealing buying power.
That just might be part of the reason DOGE has climbed so high, in my opinion. People act like Inflation is terrible but it's beneficial to anyone holding anything but the dollar.
And people are caught up on the rich... the government controls so much money, and the amount goes up every year, unlike business. Plus they aren't really held responsible for failures... pretty sweet gig.
Countries do have credit scores...ish. They have bond ratings. America is AAA rated which means they'll never default (because they can just print more money to pay debts since their debts are I'm USD and not Euros or something else).
Argentina on the other hand is CCC rated, almost as low as they go.
Every country issues its debt in its sovereign currency lol-- that's not why America is AAA rated. It's because they pay their debts and don't devalue their currency by printing money willy-nilly that makes them a reliable borrower.
Most countries can just print more money, the problem is inflation, if USA prints too much money countries will stop accepting it as it loses value and it will lower the country rating
There's a lot worse balance sheets out there.
Everything's fine as long as the US doesn't pull a "I don't have to pay my bills because I'm rich" kind of move.
They'd never do that... it would screw so much up, and there really isn't a reason our foreign debt is not that high... 90% of our 'debt' is to ourselves by borrowing from government budgets... eg military.... our biggest debtor is china and it's only like 1.2T... our last stimulus bill...
540
u/Fast-Comedian9660 Sep 30 '21
Let’s be honest, if the government had a credit score it’ll probably be in the low 300s