131–140 of 242 posts
As long as our political system continues to be run on professional politicians who pander to their base in order to keep their jobs we will never fix anything. Anyone who runs a household, a business, or both, clearly understands that sometimes you have to make decision that are painful in order to survive and grow. Our elected officials know that the masses would boot them if they make the right decisions for the n…
Earlier quoted context omitted.
I was answering "Why is the ability to pay considered at all when it comes to the US?" Perhaps I misunderstood your comment, but it read like "it doesn't matter because we can pay all debts."
The government can always pay its nominal debt with interest. I didn't say they were not going to inflate the debt away or that this would be OK. But S&P did not make that assumption in its rating. S&P assumes a 2% inflation rate.
The meaning of the downgrade is, if the inflation rate is 2% then there's a risk that US doesn't pay its debts. Now, if US does pay the nominal debts as you assume, then you cannot assume the inflation rate is only 2%.
If paying the nominal debt guaranteed an AAA rate regardless of inflation, then every country in the world would have an AAA rate. Argentina would just print a lot of pesos and then buy US dollars with it. Europe would just print a ton of euros and Greece et. al. would have no problems.
I hate it when students whine about the unfairness of their lousy grades and how they really deserved a higher one. It's even worse when the Treasury Department does it.
Earlier quoted context omitted.
You are whining. There are lots of legitimate reasons to complain about teachers. You gave one legit (changing course requirements midway), and lots of illegitimate ones. You do not have a respectful tone. Plus, the fact that you would have only gotten a D makes you look retarded in the eyes of most on HN. It's hard to get sympathy from an intellectually snobby group by bragging about your failure to excel. In short,…
What were the illegitimate reasons? I suppose the one about someone else accidentally taking my homework? I don't think I could have helped that and any reasonable teacher might have given me half credit. I got a bad grade for lots of reasons. I hated the class. This was a teacher that tried telling me light travels at 300 meters a second. She also arbitrarily handed out grades, marking one of my answers wrong (0m/s^…
If I were your teacher and you told me that story you would be lucky if I didn't accuse you of academic dishonesty on the spot and filed the relevant paperwork. In the absolute best case scenario, assuming your total honesty, it's yet another lame variation on "my dog ate my homework". You are responsible for your work, nobody else.
Earlier quoted context omitted.
I was answering "Why is the ability to pay considered at all when it comes to the US?" Perhaps I misunderstood your comment, but it read like "it doesn't matter because we can pay all debts."
The government can always pay its nominal debt with interest. I didn't say they were not going to inflate the debt away or that this would be OK. But S&P did not make that assumption in its rating. S&P assumes a 2% inflation rate.
S&P's mistake is certainly incredibly embarrassing but apart from that I'm asking myself a much more fundamental question: Why is the ability to pay considered at all when it comes to the US? A country that is indebted in its own currency can theoretically never default on its nominal obligations. Not due to inability to pay at least. I don't think that credit rating agencies even try to pass judgement on the likelyh…
Infinite borrowing and defaulting are consequentially the same. I'm absolutely amazed that people believe otherwise.
Earlier quoted context omitted.
The government can always pay its nominal debt with interest. I didn't say they were not going to inflate the debt away or that this would be OK. But S&P did not make that assumption in its rating. S&P assumes a 2% inflation rate.
What is your point? The meaning of the downgrade is, if the inflation rate is 2% then there's a risk that US doesn't pay its debts. Now, if US does pay the nominal debts as you assume, then you cannot assume the inflation rate is only 2%. If paying the nominal debt guaranteed an AAA rate regardless of inflation, then every country in the world would have an AAA rate. Argentina would just print a lot of pesos and then…
No, because creating peso inflation does not reduce Argentinas dollar debt. But dollar inflation does reduce the USA's dollar debt. Therefore it makes sense to rate the ability of Argentina to pay its nominal dollar denominated debt but it makes no sense at all to rate the ability of the US to pay its dollar denominated debt.
Earlier quoted context omitted.
The government can always pay its nominal debt with interest. I didn't say they were not going to inflate the debt away or that this would be OK. But S&P did not make that assumption in its rating. S&P assumes a 2% inflation rate.
Whether S&P says it or not, then, we should consider part of the 'default' risk being that USGov intentionally, strategically breaks those stated inflation assumptions.
According to the CBO last week's budget agreement cuts $2.1-2.4T in spending [1]. S&P's guidance was that we cut $4T. So either the CBO is off as well, or this typical Washington budgetary spin. [1] http://cbo.gov/doc.cfm?index=12357
S&P's guidance was based on an analysis that made the $2.1T mistake. So $2T+ in cuts plus $2.1T error puts us exactly where we would have been if they were originally right and then we cut $4T.
Earlier quoted context omitted.
What is your point? The meaning of the downgrade is, if the inflation rate is 2% then there's a risk that US doesn't pay its debts. Now, if US does pay the nominal debts as you assume, then you cannot assume the inflation rate is only 2%. If paying the nominal debt guaranteed an AAA rate regardless of inflation, then every country in the world would have an AAA rate. Argentina would just print a lot of pesos and then…
If paying the nominal debt guaranteed an AAA rate regardless of inflation, then every country in the world would have an AAA rate No, because creating peso inflation does not reduce Argentinas dollar debt. But dollar inflation does reduce the USA's dollar debt. Therefore it makes sense to rate the ability of Argentina to pay its nominal dollar denominated debt but it makes no sense at all to rate the ability of the U…