Nice post! really puts things into perspective!

Uncle Sam is broke flat on his ass. The Chinese have been asked to loan money to you! They have you by the balls Yankee Doodle, and they eat meat!

Now that is great analysis!

I’m willing to bet that this score is on its way down. Way Down. For a long time to come.

What’s Japan’s FICO score? I am afraid of the answer.

My own score is 100 points higher and even that is not good enough to get a low down payment mortgage.

Gonna give this page the Stumble Thumbs up.

Well that explains a lot! Nice post.

the money to buy bonds comes from government spending. the federal government is not revenue constrained and we DO NOT need to borrow money from the chinese. they accumulate fx reserves (bonds) due to a trade surplus and a fixed exchange rate. notice they will be buying less treasuries as their trade surplus shriks.
the above analysis is cute but meaningless. BTW, when you say “entice creditors with attractive rates” are you saying 10 yr treasuries at 2.41% are attractive? its always a problem when facts get in the way of a story.

Technically social security and Medicare aren’t really debt, but I think they should be included as debt for the debt part of the calculation. After all no one is calling for them to be dissolved and they are massive payments that are going to be required in the future.

Where is the valuation of assets to compare with the dept level? If a person has a mortgage for example – he also owns a home, in case of Uncle Sam – there are many direct assets like military assets, government owned real estate , lately bank and company stocks and much more. The people can also be considered an asset. For example taxes maybe increased or enforce more harshly.

Congratulations Mr. U. States!

Due to your EXCELLENT credit score, you have been qualified for a 800 Billion Dollar Loan! Use it to fix up that kitchen or add a deck. How about a cruise?

{800 Billion at 29.9% APR over 135 years. Applicant must learn to speak Chinese.}

I realize this is a joke, but you do realize how nonsensical it is, right? Right?

I mean, right up there when you say, “it can print money to meet it’s need, devaluing it in the process” you do realize that that’s not what happens, right? That “printing money” (or what is understood as such) does not and cannot happen in a modern floating exchange rate regime?

I’d recommend a remedial course in reserve accounting, if I thought it would do any good. Short of that, try this:

http://www.moslereconomics.com/mandatory-readings/soft-currency-economics/

Insta-Pundit notes that the US rating has an extra rating category not available to ordinary borrowers — “Can take money at gunpoint.” That’s the ticket.

Awesome! Seeing this score at other points in time would add to the fun. (1776, 1790, 1830, 1860, 1920, 1941, 1950, 1980, etc.)

[...] I’m not sure if I’m pleased or troubled at having a better FICO score than the U.S. government. [...]

[...] January 9, 2009 · No Comments Looks like America could qualify for a Discover Card. [...]

Yes, this is ridiculous for a govt that uses its own non convertible currency and a floating exchange rate policy.

Note that Japan’s debt is triple ours as a % of its GDP, it’s been downgraded below Botswana, and has been instantly selling its securities at near 0 rates for over 10 years.

Turkey has run inflation rates of over 100%, has had a currency that was dropping at over 50% annually, and had no trouble selling quadrillions of lira securities when no one had calculators that even went up that high.

Clearly selling govt securities for non convertible currency with a floating exchange rate policy has nothing to do with ’solvency’ nor is solvency an issue.

A credit score in local currency is inapplicable.

More important, the govt deficit EQUALS (by identity- national income accounting) to total net savings of financial assets of all the non govt. sectors.

So the larger the deficit the larger the savings outside of govt, because that’s where all net savings of financial assets comes from.

Today, govt. spending is nothing more than an entry on its own spreadsheet. That is the ONLY way govt. funds are ever spent.

Get over it and move on!

Warren Mosler
http://www.moslereconomics.com

The US credit score is barely above mine, then why is it so hard for me to obtain a loan? Doesn’t seem right.

This post only shows how silly the credit score system is. Now lets see the credit score for banks receiving billions in bailouts.

Bankers are usually several times more leveraged than their customers and yet have the nerve to use credit scores in determining loan qualification. There is ample evidence that lenders are some of the worst judges of credit worthiness.

Were it nor so many would not be in the trouble they are.

Interesting post, I will say!

It’s my understanding that there are already nations (such as the Soviet Union) which do not accept dollars as their reserve currency.

When GDP (goods + services) cannot keep up with the flood of new currency ($800B is a pretty large peach pit to deal with), the value of the dollar goes down. It goes down relative to specie and it goes down relative to other currencies. As closely tied together as the two nations are, currently the Canadian dollar is worth more than the USD … an abrupt shift from past decades.

Our pennies now have so little value that the raw copper is worth more … so, having abandoned the gold and silver standards, we are acknowledging defeat against the de facto copper standard, too. New pennies are plated to look like copper … old pennies are being melted down to make wire with.