The US has a fantastic credit score. Being the world’s reserve currency helps.
And collateral lol
Crypto
Unstable, and mostly used for speculation or illegal activity. Ew.
for now
Forever until a powerful state starts to charge taxes in crypto.
Technically, at least where I live in Canada, you have to pay taxes on crypto income and capital gains. It’s possible for goverments to track crypto transactions.
That being said, if you think normal fiat currencies are without crimes and illegal activities, you’re kinda stupid.
I’m not talking about the current way, I’m talking about the possibility of a privacy-focused crypto, issued by the state, where transactions can be made private with the Blockchain. This crypto, as it would be used for normal transactions, wouldn’t have more variability or speculation than the variability and speculation in converting US Dollars to UK Pounds. The post talks in hypotheticals, I do too.
I don’t think fiat currency isn’t used for illegal activity, I think crypto is mostly not used for normal transactions.
Well, since the billionaire class doesn’t pay it’s fair share of the tax burden, that money has to come from somewhere.
This is a popular thought, but even if we take 100% from the billionaires it pays for almost one year for the US.
While I understand what assumption you’re running under no one said for only billionaires to pay. The idea is progressive tax brackets the less you make the less you pay percentage wise. We also need less loopholes for the people that can buy lawyers and manipulate their funds to get out of paying what they should. There is no reason companies and the extremely wealthy should be paying an effectively less tax percentage than the diminishing lower middle class.
It’s not about only billionaires paying, it’s about them not being a magical money source. A higher rate might feel better, but it’s not solving government revenue problems.
Now imagine if we had taken 30-40% from billionaires every single year… hmm…
We could have a couple year of almost not having a deficit.
if it makes you feel any better you’d go to prison if you decided to run a ponzi scheme… unless you’re a bank, that is
Wait a bank is a Ponzi scheme
Not literally. I bet the poster notices the overlap between ponzi and fractional reserve lending and doesn’t care about the differences
Which is?
Lota of differences but the key is: A ponzi scheme pays returns out of future investment. Fractional reserve lending pays returns from interest collected on investments.
Bank is legal because… reasons…
Micro-economics vs. macro-economics
I strongly encourage people who still think like OP to look up what happened the last time we paid off the national debt.
…link?
Andrew Jackson sold off enough Native American land to cause a real estate bubble, and between that and other things started a bank run, and the kind of people that think they’ll win the shell game pretend it’s because non-productive debt is good, and the problem was elimination of debt, not how it was done and other circumstances (among them being on a gold standard so you can actually do a bank run)
https://www.history.com/this-day-in-history/andrew-jackson-national-debt-reaches-zero-dollars
International associations managing countries credit scores are all located in the usa. Therefore the incentive to valorize debt.
Are you immortal? Do you have an income vastly higher than the servicing cost of that debt? Do you owe the large a majority of that debt to yourself? Are you able to, if push came to shove, tell your external creditors to go fuck themselves and dare them to so much as try to collect on the debt you don’t feel like paying? If you can’t answer “yes” to all these questions, you aren’t the US and have a debt situation that has absolutely nothing in common with the US debt.
US debt is currently higher than their GDP. Even if they could leverage the entire country into only paying debt (they can’t), it would take over a year to pay off. At the current average interest rate of ~3%, that’s enough to pay for the entirety of NASA’s budget five times over.
The last time US debt was greater than their GDP was the second world war.
Ignoring, for a moment, the inherent and fundamental differences between an individual and a state…
…in my late 20s and early 30s I bought a new car.
At the time, that car cost more than I had in my accounts plus my other possessions at the time. In fairness, my annual income was more than the total cost of the car, buuuut I also was carrying tens of thousands of dollars of student loan debt as well, meaning my overall total debt was significantly higher than my annual income, or my “personal GDP” if you will.
Yet when I applied for my car loan, it came through with easy approval and I even qualified for the best possible interest rate.
Why? Because I’ve always paid on my debts adequately and promptly.
Nobody bats an eye when a couple buys a house that costs more than what they can cover with their combined income in one year. Why? Because that’s an arbitrary and unrealistic yard stick of comparison and nobody expects them to pay off a house in a year. They’re able to buy their house and live in it immediately, and pay for it incrementally, over time, as they earn over the coming years because of debt. And the bank is willing to lend the money because they’ll make money in the long run through interest.
Similarly, it’s unreasonable to imply that the US shouldn’t carry more debt than it’s GDP because the two metrics aren’t directly linked in any way. And since the US has excellent credit worthiness, that debt is far safer than the bank’s loan to the homebuyers. And the US gains access to borrowed funds by setting it’s own interest rates through the Fed, which tells lenders exactly how much they’ll make in interest if they let the US government borrow some of their money.
And since the US is a safer bet than homebuyers, that’s why home interest rates are higher than the rate at the Fed: if they were equal, banks would never lend to homebuyers since they could get the same return by lending to the government. So instead, they set their own, higher rates for homebuyers, to account for the higher risk of lending to a party who has a much higher likelihood of default.
They said service the debt, not pay off the whole thing. For an analogy, your whole mortgage being less than your annual salary isn’t a requirement; your monthly mortgage payment being a fraction of your monthly salary is.
…or, since the federal reserve creates money, they could do quite literally 100 strokes on a keyboard at the FED and repay the debt. A state doesn’t fund itself through taxes, taxes serve many purposes but funding a state isn’t one of them.
Do not forget that you are also the very entity that hands out the currency you hold your debt in.
It’s like Dwight printing IOUs for Schrutebucks
Wait till you learn about how the stock market works. Everyone with a share actually just holds an IOU in the DTCC.
It’s all built on bullshit
I remember users on another platform went into full rage mode when I said the stock market was just legalized gambling, telling me how SAFE!!! IT IS IF YOU DO YOUR RESEARCH!!!>
Okay. Black Friday and Too Big to Fail only happened in my dreams.
If you had 34 trillion in debt and a centuries-long history of making on-time payments, you’d have a perfect credit score.
“Bankers hate him! Get an 850 credit score and dictate the terms and interest rate of your own debt using this one simple trick.”
The US govt basically has a perfect credit score. They have almost infinite payment history and almost infinite available credit.
Credit rating also depends on credit to debt ratio. You want to keep it below 35%, so the US wouldn’t need a credit line of $100T or more to have great credit.
I think sovereign debt would work like an AmEx Platimum with “no fixed limit”, which makes makes the algorithm ignore utilization.
Yeah, this is just people not understanding how credit scores work, part #57294, lol
Hey remember that one time where the country’s credit rating got downgraded due to political idiocy?
Pepperidge Farm remember.
Don’t forget being the only issuer of the currency you get indebted in. If I could get indebted in a currency I create myself, believe me I would
Articles and posts like this really just exist for conservatives to shout that we need to stop federal spending and cut out “unimportant” things like Dept of Education, as described in Project 2025.
The problem is that debt is good. It enables us to pay for infrastructure projects and services. It doesn’t work like a household budget…not on the scale of international economies…because money “in the bank” is money that’s not in circulation.
When money is not in circulation, it’s not being used to pay for goods and services…it’s just…sitting there being hoarded.
You all complain about Musk hoarding a few hundred billions. Imagine if the debt were in the opposite direction and the government had $34T sitting in the bank doing nothing.
And anyone can buy Treasury debt. In fact, last year it was an AMAZING return on investment for anyone that bought into it and holds into the debt for a few years. One of the safest places anybody could put money to earn a return (behind a HYSA at FDIC insured banks).
When money is not in circulation, it’s not being used to pay for goods and services…it’s just…sitting there being hoarded.
This is why I think the velocity of money should be a key economic indicator. Money moving around and doing work is what makes an economy better for everyone. When it starts to pool in the economy it slows down and benefits only a few.
This is another thing I learned from “Making Money”
Fully agreed, the whole “Debt bad! Deficit evil!” trope is just neoliberal propaganda against public expenditure, which translates into a weakening of the welfare state
What about staying at 0? Why is debt better than no debt AND no surplus?
And it’s rising at $1 trillion per 100 days in interest.
I heard that the us still has good credit because although it owes trillions, it is worth quadrillions (all lands and assets), so not really a concern
Worth pointing out that credit scores are completely detached from the government. They are entirely private industry, that is collecting and selling your financial info without your consent or opt in. If you were born before 2004, then they have also accidentally leaked literally all your personal info to the dark web, with literally 0 consequences.
Nah uh! We forced them to pay an hour’s worth of profits to their own charity!
have you considered printing your own money?
Yes I have but then I relized hey that’s illegal
Printing imitation US dollars is illegal. Printing Varven Bux is legal! They may not be accepted everywhere, though.
Money = reputation
So I have a money for putting out easily? That tracks, actually.
It’s not even about reputation, it’s mostly about taxes. You enforce the private sector using the state’s monopoly of violence to pay tributes in a currency that you create. This way, when there are transactions in the private sector, the main currency that people will want to use (provided it’s stable enough) is the one that lets them pay their taxes later. You can’t pay taxes with dollars in Hungary, which makes Hungarian people use Hungarian currency instead of Chinese Yuan even if the Chinese Yuan is a much stronger currency.
And yes, the state having the monopoly of violence and enforcing taxes is a good thing, before anyone accuses me of being an anarchocapitalist.
Imitation is illegal… Smh why does nobody just print real money? Am I the only one seeing this loophole?!
Two things:
- if you owe the bank $34,000, it’s your problem; if you owe the bank $34,000,000,000,000, it’s the bank’s problem.
- its a big club, and you’re not in it.
That’s a lot of zeros, when written like that
Yes, and it is the correct number of zeros to use. I find it helps to put things into scope. “Trillion” is an abstract magnitude to most people. Writing it out numerically makes it clear how absolutely enormous the number is.
Terry Pratchett’s “Making Money” taught me enough economics to know that individual debt and national debt are two different things.
Hey bud, guess what? The gov don’t hand out a credit score, the banks do.
This entire meme is just OP admitting they don’t know how finance works in the US.
It’s a meme not a dissertation on finance.
From one pedant to another, you’ve gone to far this time.
