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by quadragenarian
473 days ago
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Well one of the reasons we can be so spendthrift in this country is our financing rates staying so low despite massive amounts of debt. This is due to confidence by global investors and asset managers in the US's economy and ability to pay back its debts. The US can try to renegotiate or not pay, but that's an overt signal to investors that the US is not reliable and will result in the 10-year Treasury bond rate soaring, probably permanently, which will decimate our country's credit and is an own goal that we probably wouldn't be able to come back from economically. |
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The 10 year rate is not a force of nature. It is set at auction by investors who believe US t-bonds are a safer resting place than those of the economies that were destroyed by the nukes.