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Comment by cchance | Hacker News Reader

It's almost like congress holding the fucking debt limit hostage every few months isn't good for the rating or the country as a whole.

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For sure. Possibly the magnitude of our debt is an issue too.

We don't need to speculate.

>Ratings Downgrade: The rating downgrade of the United States reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to 'AA' and 'AAA' rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions.

It doesn't take an economist to take one look at statistics like this (among others) and think, "that doesn't look promising."

https://fred.stlouisfed.org/series/A091RC1Q027SBEA

Or, well, a lot of just general statistics around the debt once you consider what they literally mean.

https://www.usdebtclock.org

Apparently you do, because that chart shows inflation more than anything else.

The chart you actually want to make your point is this one: https://www.crfb.org/sites/default/files/Screen%20Shot%20202...

Which is still not great, but it isn’t an arbitrary exponential with no context.

Yep - the fact that they listed this at the very top of the reasons above any kind of debt or spending numbers is pretty telling.

And they're not wrong

Except it's not.

> Ratings Downgrade: The rating downgrade of the United States reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to 'AA' and 'AAA' rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions.

I believe the “holding the debt ceiling hostage” falls under erosion of governance.

Yes, but there are two other reasons before that (projected fiscal deterioration, high debt burden). So it's in the list of reasons but, not at the "very top".

A high and growing debt burden on the US government has been true for decades, that hasn't changed, what seems to have more impact is exactly the erosion of governance. The constant stand-offs holding the budget hostage isn't a thing that happens with other AAA-rated governments, it's pretty unique to the USA and has been happening constantly for the past decade+.

I believe what the other comments mentioning "at the very top" mean is that it's there on the by-line, not buried somewhere else in the report. To me it makes sense to call it "at the very top".

There's no incentive to do anything except wait until the last moment.

From a game theoretic perspective, waiting until the last moment is the most optimal.

Therefore, it will continue to happen until the voters find it so unpopular they begin voting out politicians that behave like this.

It is a not solely a two party game with the only outcome a win. It's connected to the economic health of the entire country and likely the rest of the world. Businesses make plans based on future expectations; when Congressional idiot posturing creates uncertainty, this requires planning for volatility, which imposes a cost on every transaction, lending rate, and plan.

The incentive is showing up here. Lose a little rating, it's harder to rotate national debt, and suddenly the ~10% of the budget used to service the debt balloons to 50% as borrowing rates increase. This would be a catastrophe.

That is the "game" being played.

The reason the public isn't outraged is because they don't understand these connections

The game congressmen are playing is getting re-elected. They don't care about

> the economic health of the entire country and likely the rest of the world

Our political system in the US is set up in such a way that those who acquire political power are going to spend as much time and effort as possible keeping it or acquiring more power. Any improvement that comes is secondary compared to getting re-elected

It's demonstrably wrong to put all Congress people into such a simplistic bucket. Plenty of people on both sides understand the economic issues and act accordingly. The belief that all politicians are the simpletons you describe leads to current bad outcomes, and continuing to spread it only deepens the divide.

This basic principle is true in any political system, from communist one party states to corporate ladders.

The more specific problem is that the incentives aren’t aligned, because voters aren’t capable of seeing the relevant causes and effects. When the only thing voters react to is immediate economic conditions, of course politicians fight tooth and nail for more spending when they are in power and cuts when they are not.

Downgrading from a AAA rating to a AA+ rating sounds like the least advantageous from a game theory perspective as well.

I wish politicians weren't so short-sided.

There's only one side holding the debt ceiling hostage, it's just a conservative problem.

Ironic, considering they literally had the power to raise the debt ceiling for two years while they were in Congress. But it's too much to ask that they have less than a year of foresight.

https://www.axios.com/2023/05/23/democrats-debt-ceiling-regr...

The would have needed Manchin's support, and without periodic debt ceiling emergencies he wouldn't get as much airtime to advocate for cuts.

https://www.washingtonpost.com/opinions/2023/02/07/joe-manch...

Raising the debt ceiling isn't righteous. The dollar is almost exclusively backed by two things: the petrodollar and the subsequent ability to open the gates of hell in order to defend it.

We are right to consider why we are a primarily export-based economy with a dollar tied so tenuously to oil. Blaming Republicans, when in fact it's a problem of crony-capitalism, is somewhat shortsighted. Some of the richest, filthiest, congresspeople are Democrats. To assert it's one-sided is very sound-bite politics of you. I would go to open secrets and see just how equal congresspeople are in exploiting the national debt for political and financial gain.

The debt ceiling needs increasing when the budget that was already approved needs money. If the contentious part is not spending so much then those Republicans shouldn't have approved the fucking budget at first.

This line of reasoning makes no sense... Holding the debt ceiling hostage is just posturing, and from your comment and some others it really seems to work even in seemingly intelligent people, imagine with the rest of the voters?

Agreed. Although progressive politicians, or as I like to call them, the right-light, do contribute their fair share of problems.

It's also a democrat problem in that when dems get power they haven't just decided to eliminate the debt ceiling all together.

But then, that's because moderate/conservative democrats have decided it's to scary to eliminate the debt ceiling (there's not enough votes for that). So maybe still a conservative problem but not entirely a republican problem.

Not dissimilarly, the EU has over the years been famous for absolutely last-minute agreements.

The last few times this particular form of terrorism has been tried, it has achieved little. If the people threatening us had won major victories then maybe the strategy would make a sick kind of sense. Instead they won token policy concessions at best. Causing real harm to the people whose vote you need in exchange for make-believe gains is not generally a good strategy.

But there are actually people deluded enough to say Biden was responsible for the most recent hostage-taking, so hell if know what's going on. Maybe the GOP could actually blow up the US economy without consequences.

Let's be real: it's only part of congress.

Am I reading the insinuations properly, that people are blaming Republicans for the rating change because they dare to question printing unlimited money, and belive if Republicans were more "responsible" and just allowed money to be printed unchecked there would be no problem?

I see no evidence that either party wants to restrain spending when in power, but pretending this is a partisan issue and that one party is at fault for questioning spending as apparently some are doing is reality distortion to a new extreme.

> Am I reading the insinuations properly, that people are blaming Republicans for the rating change because they dare to question printing unlimited money, and belive if Republicans were more "responsible" and just allowed money to be printed unchecked there would be no problem?

If the GOP has an issue with "printing unlimited money", perhaps they should have cut spending when they had full control of Congress and the White House, rather than implementing cut taxes and boost spending:

* https://en.wikipedia.org/wiki/Tax_Cuts_and_Jobs_Act

The GOP only has an issue with "printing unlimited money" when there is a Democrat in the White House.

The Republicans were also quite adamant on spending control during the Clinton (Democrat) years:

* https://en.wikipedia.org/wiki/1995–1996_United_States_federa...

But much less so under the Bush (Republican) years:

* https://en.wikipedia.org/wiki/Bush_tax_cuts

Reminder: it was under a Democratic president (Clinton) that the US had a budget surplus:

* https://www.brookings.edu/articles/a-surplus-if-we-can-keep-...

* https://en.wikipedia.org/wiki/Economic_policy_of_the_Bill_Cl...

And it was lost under a Republican president.

So yes: it is one particular party that is more of the issue.

> blaming [] for the rating change because they dare to question printing unlimited money, and belive if [] were more "responsible" and just allowed money to be printed unchecked there would be no problem?

The debt limit adjustment is to allow the treasury to borrow enough to cover payments already approved by congress. It is meretricious to object to that: if you don't think the money should be spent you should not have approved the spending in the first place.

Republicans specifically want to use the debt ceiling as a way to extract concessions when they don't have both houses of Congress.

> people are blaming Republicans

Well yea of course they are. You act like that's some kind of terrible thing to do, lol.

On HN holding one party more culpable than another tends to garner downvotes and flags.

The Democratic Party has historically not opposed raising the debt limit, so this is one of the few occasions where “both sides” is objectively wrong.

(I’d argue that “both sides” thinking is usually lacking in objectivity, but this seems unarguable.)

Reality has a well known _ bias.

Flags should seriously be removed. They only serve for mindkilled censorship voting by political partisans.

Don’t write insane things and usually you won’t get flagged.

Write things outside the Overton window, and usually you will get flagged.

About 1/3 of the comments in here are excitedly arguing exactly the opposite - that the brave souls holding the debt limit hostage every year are saving the country.

Which of course is bull shit. But here we are.

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