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by jaydz 5447 days ago
Don't forget the borrowing cost of EVERYONE will go up. Since the triple-A U.S debt notes are used as a benchmark for all other debt.
1 comments

That's not exactly true. We benchmark debt off of a theoretical "risk free" rate of return, not US bonds.

We tend to use US debt as a proxy for the risk free rate, which doesn't exist in real life. If US debt were no longer perceived as approximately risk free, we'd just stop using it as a proxy, and come up with some better (say, US treasuries minus half a point).