Moody’s strips U.S. of triple-A credit rating

Re:Moody’s strips U.S. of triple-A credit rating by scoofy on Friday May 16, 2025 @08:36PM (#44011088)

The double digit rates were because of the inflation following the dollar being de-pegged from gold in 1971. It was easy to pay the massive interest rates because the point of the high rates was to bring inflation down. The idea was that people did not want to hold US debt exactly because the inflation was a de facto partial default.

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Re:Moody’s strips U.S. of triple-A credit rating by ajross on Friday May 16, 2025 @08:43PM (#44011121)

I don't follow that economics. How does interest rates being high make bonds easier to pay? And how to I get some of that action, that sounds pretty magic to me. :)

(No, that's not correct. Borrowing in the 80's was more expensive. Period.)

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Re:Moody’s strips U.S. of triple-A credit rating by scoofy on Friday May 16, 2025 @09:45PM (#44011420)

You’re mistaking rate vs outstanding debt.

If I have a $1M mortgage at 6%, and a $1000 credit card debt at 25%, which is harder for me to pay off, assuming I make $100K per year?

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Re:Moody’s strips U.S. of triple-A credit rating by ajross on Friday May 16, 2025 @10:18PM (#44011551)

Click on the link. I assure you I am not.

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Re:Moody’s strips U.S. of triple-A credit rating by scoofy on Saturday May 17, 2025 @01:54AM (#44012319)

I see your point. I suppose my only response is that a significant amount of our debt is being rolled over annually. It’s currently being rolled over from extremely low interest rates to non-trivially high interest rates. We should expect the spike on the left side of the graph to keep increasing unless rates decline significantly, soon.

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