

Show HN: Why the US got downgraded - lukeqsee

<p><pre><code>    U.S. Tax revenue:    $2,170,000,000,000
    Fed budget:          $3,820,000,000,000
    New debt:            $1,650,000,000,000
    National debt:       $14,271,000,000,000
    Recent budget cut:   $38,500,000,000
</code></pre>
Let's remove 8 zeros and pretend it's a household budget:<p><pre><code>    Annual family income:                   $21,700
    Money the family spent:                 $38,200
    New debt on the credit card:            $16,500
    Outstanding balance on the credit card: $142,710
    Total budget cuts:                      $385
</code></pre>
Puts it into perspective a bit, huh?<p>(Source: https://plus.google.com/u/0/115560790731793704368/posts/5TRu4CdDW3R)
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MaysonL
This line of argument is basically BS. Families lack the power to tax, the
power to issue currency, and the power [currently] to borrow for 10 years at
less than 2% interest.

~~~
lukeqsee
True; however, it seems to have at least some validity. (Please expound if I'm
wrong.)

Obviously because the US borrows in Dollar-denominated bonds they can control
the value of those bonds, but the difference is still staggering.

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antimora
It's a wrong way of looking.

Rating is based on associated risks not the income and expenditure. Certainly
they help calculate risk but you can't rely on it purely.

The U.S. credit rating was changed after a political crisis arose, which put
some uncertainly to pay creditors ontime.

