This global crisis what could it be Yes United States of America does not raise your debt ceiling and became unable to meet its financial obligations for the first time in its history. closer. This Monday, the Secretary of the Treasury, Janet Yellensent letter to congress that it was put forward at the beginning of the calendar of possible disaster Juneas soon as possible 1 day.
Notification created renewed sense of urgency Seeking a negotiated solution between Democrats and Republicans leaders in congress the president called Joe Biden for day 9. But at the moment the probability of a deal is very low. This Republicans demand spending cuts agree to raise the debt ceiling, but The president and his party refuse to accept the terms and call for a separate negotiation for their open cuts, demanding that the step be taken without compensation.
for Senate you left only 14 day sessions until 1 June, House of Representatives 12And Biden He has a trip on his agenda. Japan and Australia from 19-24 May.
Crisis
The US has already exceeded the debt ceiling in January. $31.4 trillion. Since then, the Treasury budget maneuvers and emergency measures to meet your payments civil servant and soldier salaries up to social Security, passing Contractual obligations with whom did they buy Treasury bond.
Yellen’s letter warns that these exceptional measures will be exhausted sooner than expected. decrease in tax revenue. And even though uncertainty is admitted and critical date may change and weeks later the letter is marked with an emergency tone.
“Given the current expectations, Congress must act immediately to remove or suspend the debt limit long-term certainty Yellen said the government will continue to make its payments.
Moreover Congressional Budget OfficeThe nonpartisan released a report on Monday, pushing the probability of the onset of the crisis to June, which it had previously calculated for July and even September.
Global influence and political warfare
Although the effect of the earthquake caused by default will be felt especially in the USA, it is a part of the earthquake. recessioncrisis will shake the markets, Shaking confidence in the US and I would put global economy in crisis according to most observers and analysts. And the fears are already starting to emerge: Investors sell three-month debt bonds and intensifying only buy one month old ones. has been Risk premium skyrocketed To secure this debt.
The US was already facing a similar rift in 2011, and although the crisis was averted by Barack Obama’s acceptance of spending cuts, it was the first time the country saw its debt downgrade. However, the moment of political confrontation between Republicans and Democrats worsened than during the Obama presidency, and Conservatives raising the debt ceiling when Donald Trump arrives retained the presidency now as demand essential condition spending cuts are something Democrats reject.
Republicans who controlled the country last week low camerathey approved law this would allow the debt ceiling to be raised by $1.5 trillion, or March 2024. spending cutsrequires greater workforce access to assistance programs and It would undo some of Biden’s legislative gainslike some investments to fight the climate emergency or more funds to prosecute tax crimes. Chuck Schumerleader Democratic majority controlled by the SenateHe said he had no choice in the law’s House and graphically described the proposal as follows:died before birth”.
That same Monday and despite an invitation to negotiate with four Republican and Democratic leaders in Congress Biden He was very critical of the conservative position. “For over 200 years, the United States has never paid its debt. To put it colloquially, The USA is not a criminal nation. As a result, we are one of the most respected countries in the world.” “We pay our bills, and we must do so without being seen as complicit. Recklessly taken hostage by some MAGA Republicans in Congress” is a reference to Trump’s most loyal allies and the ‘Make America Great Again’ movement.
Kevin McCarthy But the Republican leader in the Lower House, who was elected to office by making concessions to the party’s most radical wing, has already allowed two turbulent years to be expected, agreeing to meet with Biden. However, in the statements he made in Jerusalem, which he visited, he warned that they would not support raising the debt ceiling without doing something about spending. “President Biden refused to do his duty, threatening to put our nation in first default, and time is running outAnnounced.
While some Republican lawmakers have shown their willingness to support a temporary and short-lived increase in the debt ceiling to make more room for negotiations, most Democrats insist on rejecting any deal linking it to cuts. “The only thing scarier than not negotiating with Republicans is doing it.”, said Senator Brian Schatz. “They never cease to hold the American economy hostage.”