Fitch Downgrades the US Rating to 'AA+'

People will complain about the debt ceiling -- granted, it&#x27;s kinda dumb -- but it&#x27;s also the only speed bump left to unlimited money printing.<p>The core issue is the size of the debt. The US is constantly paying off old debt with new debt. Except this year the cost of those funds quadrupled -- which means, even more debt.<p>If interest rates stay high for several years, our national debt will balloon out of control. At a point we&#x27;ll have no money left for anything but interest on the debt, or we&#x27;ll just print so much money to pay interest on our national debt inflation will come back with a vengeance.<p>At some point I&#x27;d love to see a grand bargain where we 1) raise taxes a bit and 2) lower spending a bit. I&#x27;m not holding my breath...

It&#x27;s almost like congress holding the fucking debt limit hostage every few months isn&#x27;t good for the rating or the country as a whole.

I think that downgrading the US rating is more funny than practical.<p>I can&#x27;t help but quote this again: «The U.S. has a comparative advantage as a safe financial haven. We have the world’s strongest military and a stable government. Thus, we have a comparative advantage in producing debt, primarily government debt. That is not necessarily a good comparative advantage to have.» (Arnold Kling)<p>If there was time to downgrade US debt it would likely be the time when the US rapidly moved and even outsourced its production to China, shutting down local factories. That was the time when the risk for the US might was increasing, should the US-China relations sour (as they have). But of course downgrading wasn&#x27;t happening then; I suspect it was the other way around.

Fitch really does not like the repeated debt limit drama.

How reliable are these ratings? In the aftermath of the subprime mortgage crisis we learned their algorithms can be easily beaten (repackaging dog shit securities) or just outright fraudulent.

&gt; Fitch’s credit ratings do not directly address any risk other than credit risk.<p>&gt; ESG: ... These scores reflect the high weight that ESG has in Fitch&#x27;s proprietary Sovereign Rating Model. ... <a href="https:&#x2F;&#x2F;www.fitchratings.com&#x2F;topics&#x2F;esg" rel="nofollow noreferrer">https:&#x2F;&#x2F;www.fitchratings.com&#x2F;topics&#x2F;esg</a>

To me the fact that the US gets to dance around defaulting while still holding a AAA rating shocks the conscience. It’s not sustainable. One of these days there’s going to be an <i>oopsie we just defaulted</i> followed by 1000 articles about why it’s not that bad and we should’ve defaulted a long time ago and it won’t happen again. But the bottom line is if the US government were a person, I’d be a little hesitant to lend him money I needed back.<p>Points about the military and the strong, diverse economy mean nothing to me. They’re true and the US still barely pays it’s creditors.

Isn&#x27;t even possible for the US to pay off their national debt completely?

Considering the rating agencies put Enron on AAA ...

My knee jerk reaction is.. Does this mean <i>anything</i>?

I think it&#x27;s time to revisit MMT: <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Modern_monetary_theory" rel="nofollow noreferrer">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Modern_monetary_theory</a><p>MMT paired with UBI. You can essentially wipe out all debt by printing as much money as you need, but compensating for inflation by covering everyone&#x27;s basic living costs. It seems like one of the only plausible ways forward into post-capitalism.

The Covid spending spree has consequences. I wonder in an alternative universe of mass unemployment due to business collapse whether we would still have a AA+ rating but through a different path.