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

Just a bunch of nonsense. I couldn’t care less if China wants to park its dollars in treasuries or not. It makes no difference.

[–] EightBitBlood@lemmy.world 0 points 2 months ago (1 children)

It makes no difference to you. To be very clear.

But it makes a hell of a difference to any country whose debt China is no longer buying.

Especially if that country has a budget always in the negative like the US.

How about we just check back here in a year to see how much one of us is wrong? Because I'm sure by then you'll be caring a lot more about how little of our debt China is then buying.

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

Who cares if China buys US bonds? Or doesn’t? The US has a fiat currency so it doesn’t have to issue bonds to fund spending, unlike states like California or Portugal.

If you want to solve the deficit without increasing inflation, tax the rich. They seem perpetually worried about inflation and can afford higher taxes.

But government spending is private saving, so I’m not sure why you want to trim government spending. It always leads to a crash. Look at Clinton’s surplus and the dot-com meltdown.

[–] EightBitBlood@lemmy.world 0 points 2 months ago* (last edited 2 months ago)

If you Google:

"fiat currency debt spending"

Here is the first AI result: (bold emphasis is mine)

Fiat currency is a government-issued currency not backed by a physical commodity (like gold) but by the issuing government's credibility.

Governments can issue debt (bonds) to finance spending, and this debt is typically denominated in the nation's fiat currency.

The ability to create and manage fiat currency gives governments flexibility in responding to economic needs and influencing monetary policy.

However, excessive debt can lead to concerns about the government's ability to repay, potentially eroding trust in the currency and leading to inflation or devaluation.

Inflationary effects: Increased government spending, especially when financed by printing more fiat money, can lead to inflation if the money supply grows faster than the economy's production of goods and services.

Inflation risks: Excessive reliance on debt and monetization (printing money to finance debt) can lead to inflation or hyperinflation, eroding the currency's purchasing power.

If you have a source stating anything close to what you've been saying instead, nows the time to use it. Otherwise, you are objectively wrong, and above is the proof.

Followed by the fact Moodys just downgraded the US's credit rating for the first time ever:

https://www.reuters.com/world/us/moodys-downgrade-intensifies-investor-worry-about-us-fiscal-path-2025-05-18/

(And Clinton's surplus is the crash you want to focus on? Really? Anything else maybe happen around that time in 2001 to cause that market issue instead? Maybe something in September you were never supposed to forget if you are an actual American?)