If you had 34 trillion in debt and a centuries-long history of making on-time payments, you’d have a perfect credit score.
this post was submitted on 07 Jun 2024
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"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.
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).
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Credit rating also depends on credit to debt ratio. You want to keep it below 35%, so you would need a credit line of $100T or more to have a great rating.
I think sovereign debt would work like an AmEx Platimum with “no fixed limit”, which makes the algorithm ignore utilization.
Yeah, this is just people not understanding how credit scores work, part #57294, lol
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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.
Do not forget that you are also the very entity that hands out the currency you hold your debt in.
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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.
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.
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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.
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The US has a fantastic credit score. Being the world's reserve currency helps.
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Well, since the billionaire class doesn't pay it's fair share of the tax burden, that money has to come from somewhere.
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On a serious note. Are there any countries without any national debt? Because if not then clearly capitalism is broken right?
No, if anything it shows capitalism is working. When you can increase or tighten money supply (ie when you can print and shred money) debt isn’t what you think it is. A state with money issuance powers is not a household.
I can thoroughly recommend “The Deficit Myth” book by Stephanie Kelton, if you wish to understand modern monetary policy better.
Or watch the film Finding the Money: https://youtu.be/3HRgsYSLOYw?si=g_CgqMWtC7oBCkGn
And to answer your specific question, there are countries with very low debt, but that’s usually due to either not being able to “borrow” money (again, borrowing doesn’t always mean what we would think as borrowing when you can issue your own money), being locked to another currency (Denmark is a great example - amazing economy and locked to the euro) or having a large generation of wealth (typically oil). Larger countries can issue debt more easily.
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I'm not the biggest fan of capitalism myself but the existence of debt does not mean it is broken. Debt is a mechanism to allow for solid investments, e.g. building infrastructure or schools that will create a net positive in the (far) future.
Germany for example has enacted a Schuldenbremse (debt-break) in 2009 and forbids our states to take on new debt and limits the debt taken on the federal level to a minisule percentage of the GDP. Our infrastructure is currently slowly but noticeably crumbling away, bridges are getting closed for heavy traffic and experts say many of them have become irreparable due to missing maintenance and need to be fully rebuild in a few years. The local military barracks are in such a desolate condition that the soldiers need to drive two towns over to shower. We might not take on financial debt, but an infrastructure debt that will demand an even bigger toll on us.
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Credit scores are just some fake shit that boomers made up. It's so dumb.
...except that it used to be that your ability to secure a loan was based on where you went to school, how firm your handshake was, and if you happened to have the right skin color and sex organs.
The current system certainly isn't perfect; and if you're denied a loan you have a legal right (in the US) to know the reason.
There are systemic issues, to be sure. But the nominal goal is absolutely better than what we used to have.
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Countries can print money. If the debt is denominated in your own currency you will never not be able to pay them.
This.
More people need to understand that the debt of a sovereign nation isn't analogous to that of a household.
Public sector debt is private sector surplus.
The current American debt is more than the current GDP. That would be fine, if we were paying it down, but it's growing faster than ever.
It would also be fine if it was healthy debt. Debt taken to improve infrastructure in meaningful ways, improve education, shit, even a war debt to create an old school tributary state (economically speaking).
And it would all be fine if everyone in the room were adults, and there wasn't a significant portion of America actively and willfully trying to cause governmental collapse.
The American citizen, on average, will spend $37,000 in the next decade to pay the interest on that debt, $12.4 trillion in total.
All without universal healthcare mind you. Or, on average, a reasonable retirement age.
You need to start asking yourself whether the people who keep assuring you not to worry your pretty little head about the APR on your loans, and they are ultimately partly your loans as a citizen, are actually acting in your interest.
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Tell me you don’t understand how credit score works without telling me you don’t understand how credit score works
Credit scores require you to get some kind of debt. This is because it's not a score of your financial health. It's a score of how reliably you repay your debt.
Terry Pratchett's "Making Money" taught me enough economics to know that individual debt and national debt are two different things.
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
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I wonder how many debt collector calls the Whitehouse gets a day
How much does the USA have in assets? I'm willing to bet more than $34,000,000,000,000.00.
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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
Whats really neat is that modern credit score systems are only 40-50 years old
And what's sad are the number of people that act like credit scores are a force of nature we just have to accept
putting people in debt is how people with already too much money make even more money from people who never had enough
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