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Moody's downgraded the United Sates' credit rating for the first time in history citing unsustainable path for US federal debt and its resulting interest burden. (www.reuters.com)

submitted 2 months ago by cm0002@lemmy.world to c/usa@midwest.social

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[–] SwingingTheLamp@midwest.social 8 points 2 months ago (1 children)

That's a distinction without a difference. Issuing more fiat currency to inflate away burdensome debt service would also inflate away investors' gains from holding bonds.

[–] resipsaloquitur@lemm.ee 0 points 2 months ago (1 children)

It’s absolutely a difference. Countries not sovereign in their currency (eg Greece) are slaves to the whims of the bond market. The US isn’t. The US doesn’t even have to issue bonds. It’s a relic of the gold standard.

You say inflation like it negates what I said, but it doesn’t.

[–] SwingingTheLamp@midwest.social 3 points 2 months ago

Yes, I agree, what you said is true, but it's also true that the purpose of Moody's rating scale is to assess risk to investors rather than the soundness of the bond issuer.