- cross-posted to:
- hackernews@lemmy.bestiver.se
- cross-posted to:
- hackernews@lemmy.bestiver.se
Yields on US government bonds rose in response to the news, with the benchmark 10-year Treasury yield up 0.03 percentage points after the announcement to 4.48 per cent. The rise in yield represents a fall in price.
Moody’s ratings are in the context of a business. The US is not a business, mainly because it prints its own money and can’t possibly go broke.
Countries have defaulted on their debt.
Republicans threaten to do so in the US about once a year now.
The money is based on faith. If people lose faith, it’s worthless and the US is in fact bankrupt. Taking on the entire world in a trade war and then passing a huge tax cut at the same time makes people think the country is unstable and they lose faith.