The UK's AAA credit rating. Has it helped?

[thinfourth2]

According to many it is the end of the world if we loose our AAA credit rating. which i can understand as we have a huge defict

But what if we never had a AAA credit rating?

As far as i can see all it meant was that our glorious leaders used it for 13 years to borrow lot and lots of money to buy my vote with the added bonus that i have to pay the government back what it cost them to buy my vote.

So if we had a terible credit rating would our glorious leaders still borrowed billions to buy our votes?

[roachcoach]

Doesn't it ensure we have manageable interest rate changes on international borrowing?

[Marf]

Yes, it's essentially the same as a personal credit rating, the better the rating the lower the interest charged on debt.

[roachcoach]

Presumably then there is a fear/risk of a self fulfilling prophesy of

Downgrade>more expensive debt>worse deficit>downgrade>REPEAT>greece/italy/spain scenario?

[fido]

Apply your logic to personal circumstances.
Does having a sh8t credit rating lead to feckless borrowing, or does feckless borrowing lead to a sh8t credit rating? Unless you're the sort of person who likes to shun responsibility, i would suggest most would agree to the latter.

[thinfourth2]

Marf said:

Yes, it's essentially the same as a personal credit rating, the better the rating the lower the interest charged on debt.

I know this

but if it was almost impossible for our leaders to borrow stloads to buy a big telly event would we be where we are just now?

[roachcoach]

fido said:

Apply your logic to personal circumstances.
Does having a sh8t credit rating lead to feckless borrowing, or does feckless borrowing lead to a sh8t credit rating? Unless you're the sort of person who likes to shun responsibility, i would suggest most would agree to the latter?

Having a st credit rating (in personal debt terms) leads to VERY expensive borrowing. Why do you think all these "no credit check required!" companies charge a stting fortune?

[thinfourth2]

fido said:

Apply your logic to personal circumstances.
Does having a sh8t credit rating lead to feckless borrowing, or does feckless borrowing lead to a sh8t credit rating? Unless you're the sort of person who likes to shun responsibility, i would suggest most would agree to the latter.

Would you give an idiot your credit card and pin number?

I wouldn't

So why are you happy for idiots to borrow on your behalf

[Marf]

thinfourth2 said:

Marf said:

Yes, it's essentially the same as a personal credit rating, the better the rating the lower the interest charged on debt.

I know this

but if it was almost impossible for our leaders to borrow stloads to buy a big telly event would we be where we are just now?

shrug no idea

[fido]

roachcoach said:

Having a st credit rating (in personal debt terms) leads to VERY expensive borrowing.

Yes, but having a st credit rating is a result of defaulting on previous debts! I think the OP is asking if we (or more specifically Winky & Clown) would have borrowed less if we were rated AA+ or AA and my answer is Yes - we would have borrowed proportionally less, but our TOTAL interest payments would have remained similar i.e. just as f8cked!

thinfourth2 said:

So why are you happy for idiots to borrow on your behalf

Not saying i would always lend to idiots - but if they paid enough interest and provided enough collateral then i might lend to them. Higher risk but better rewards. I'm pretty prudent so i would never lend to the Greeks, but i would stick some money on Zoopla for example.

Edited by fido on Tuesday 6th March 16:32

[thinfourth2]

fido said:

Yes, but having a st credit rating is a result of defaulting on previous debts! I think the OP is asking if we (or more specifically Winky & Clown) would have borrowed less if we were rated AA+ or AA and my answer is Yes - we would have borrowed proportionally less, but our TOTAL interest payments would have remained similar i.e. just as f8cked!

i was thinking more sort of a ZZZ- credit rating.

basically why is it good that fkwits are allowed to borrow money in my name to buy my vote

[Puggit]

I can understand thinfourth2's reasoning. If it cost a lot more to borrow, would the fkwits in charge think twice?

Sadly I know the answer too...

[BoRED S2upid]

thinfourth2 said:

i was thinking more sort of a ZZZ- credit rating.

basically why is it good that fkwits are allowed to borrow money in my name to buy my vote

Buy your vote or promise you the earth in return for your vote its all the same doesn't matter what credit rating you have, someone will buy your vote with something and then fail to deliver.

[dcb]

roachcoach said:

Presumably then there is a fear/risk of a self fulfilling prophesy of

Downgrade>more expensive debt>worse deficit>downgrade>REPEAT>greece/italy/spain scenario?

Not really - the UK is a relatively strong trillion dollar
North European economy with a good rule of law and little corruption,
not a much smaller Southern European economy with a history of defaults
stretching back centuries and wide scale and endemic corruption.

Greece is already a basket case, Portugal and maybe Spain are next,
Italy somewhere later.

Both Greece and Portugal are small economies. Spain's is much larger,
and Italy is larger still.

Like dominoes, if the problem gets as far as the fourth country, Italy,
then it's a doomsday scenario, not a likely scenario.

[baz1985]

If the ratings issued by Standard & Poor's (S&P) and Moody's and Fitch were of critical importance they would have been side-lined long ago. It is preposterous to consider that two agencies with a combined revenue of circa $5.5bn can dictate terms to the global economy.

[1point7bar]

baz1985 said:

If the ratings issued by Standard & Poor's (S&P) and Moody's and Fitch were of critical importance they would have been side-lined long ago. It is preposterous to consider that 3 agencies with a combined revenue of circa $5.5bn can dictate terms to the global economy.

EFA

[cwis]

"lose"

Sigh...

[don4l]

thinfourth2 said:

Marf said:

Yes, it's essentially the same as a personal credit rating, the better the rating the lower the interest charged on debt.

I know this

but if it was almost impossible for our leaders to borrow stloads to buy a big telly event would we be where we are just now?

That is why I wanted Labour to win the last election.

If Labour had won, then the markets would have reluctant to lend us more money. We would have been forced to cut spending. Our kids would have had less interest to pay off.

We would have had a much deeper recession, but it would have been short. We would now be experiencing serious growth.



Don
--

[slipstream 1985]

don4l said:

thinfourth2 said:

Marf said:

Yes, it's essentially the same as a personal credit rating, the better the rating the lower the interest charged on debt.

I know this

but if it was almost impossible for our leaders to borrow stloads to buy a big telly event would we be where we are just now?

That is why I wanted Labour to win the last election.

If Labour had won, then the markets would have reluctant to lend us more money. We would have been forced to cut spending. Our kids would have had less interest to pay off.

We would have had a much deeper recession, but it would have been short. We would now be experiencing serious growth.



Don
--

theres only one reason i would have wanted labour to win the last election. And that would be for them to bath in their own shower of ste they created and have to deal with burning their own voters with their policies.

[Gwagon111]

Any degree of economic certainty helps in the current climate.