The "threats" to the US ratings are purely ideological assaults on the welfare state. Downgrading the US government makes no sense from a US investor's perspective: it's always going to be the safest entity around - it can tax everyone else in the US, and no foreign government can be safer - if only becuase investment outside the US can be regulated by the US government for US domestic investors. In the long run, we're all dead. John Maynard Keynes
Downgrading the US government makes no sense from a US investor's perspective: it's always going to be the safest entity around
Why is that necessarily Jérôme? Could it not decide to default on part of his debt, or inflate away? In that case it would probably be worse than bonds from a Government that more or less balances the accounts, wouldn't it?
Having said that, I agree that in that particular case, it was pure propaganda against social programs. There was no mention of the war, or of tax cuts on the rich, which is a rather clear canary in the mine... Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi
Very theoretically, US government may put into jail investors who would divert money from US treasuries. A free fox in a free henhouse!
