Quote:
Originally Posted by Slava
Well that is all well and good except for a few things: (A) a credit rating is not really a comment on the political climate. Its supposed to be a rating on the likelihood that you can pay your debts. (B) and perhaps most importantly, the US can always print more money. In other words taking the hyper-inflation aspect out of the equation (which is not a concern in the least right now!) its virtually impossible for the US to actually default. They theoretically ought to be either "AAA" or "D" in theory because if they were that close to a default they could turn on the presses...
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I would agrue that the likelyhood that you can pay your debts has a lot to do with the politcal climate. Who controls the policies that affect and guide the economy? If they can't come to agreement, or even a path of action on what to do in certain circumstances, that's going to affect the ecomony and eventually the ability to pay debts. Maybe not right now, but in the future.
What if they didn't reach a deal? What if they don't next time? What if one party wants to print more money but the other doesnt?
As well, while what you say about the situation is absolutely correct, absolutes and 'supposed to's' don't always work they way they should in the real world. People make these decisions in the end and they are prone to look at things like political climate and uncertainty.
And as I also mentioned, (and I forget if it was before or after the post you quoted) the deal was looked at as too little anyway. So if it took that much effort and fighting just to get a deal that was about a third of what many organizations wanted, I would say the reaction is pretty understandable.