Wednesday, January 10, 2018

Tyler Durden — Moody's Warns Washington - USA Credit Rating At Risk Over Trump Tax Cuts


What exactly don't they understand about a currency sovereign?

Zero Hedge
Moody's Warns Washington - USA Credit Rating At Risk Over Trump Tax Cuts
Tyler Durden

4 comments:

Andrew Anderson said...

Non-negative* yields on the inherently risk-free debt of a monetary sovereign imply that the monetary sovereign is like a household and that balanced budgets are desirable.

*Because of overhead costs, even 0% yield on the inherently risk-free debt of a monetary sovereign constitutes welfare proportional to account balance. So negative yields on the inherently risk-free debt of a monetary sovereign should be mandated** with the shortest maturity debt (physical fiat and private sector demand account balances at the central bank) costing the most.

** With a $250,000 or so exemption for individual citizens to encourage individual saving for emergencies and initial capital formation.

Matt Franko said...

"Non-negative* yields on the inherently risk-free debt of a monetary sovereign imply that the monetary sovereign is like a household and that balanced budgets are desirable"

No it implies that the sovereign will appropriately compensate savers for deferring consumption...

Noah Way said...

It's not a sovereign currency. If it was the government would set its value instead of allowing it to be set by private interests and speculation.

Footsoldier said...

All part of the plan.


Moody's just put the ball on the tee for them to go after entitlements.


Enter stage left leave stage right.