Friday, June 2, 2023

Biden’s play to raise the debt limit

Position in America A possible default is more inclined towards a possible political career than an important economic decision.

He President of EE. US, Joe Biden urged expanding the country’s debt ceiling as a measure to take the economic course Although, as every year, the budget approval process moves through Congress, the pulse of the occasion began to be felt, Since Republicans have not put forward proposals so that President Biden can implement the proposals he has made.

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According to Alejandro Usache, Professor at the University of RosarioRepublicans are demanding from Biden that certain requirements must be met in order to be considered for approval of the budget and an increase in the debt ceiling.

,For example, reduction in public expenditure and stabilization of finances occurs at a time when the country is going through a difficult situation.”, Yuche explained.

(Biden proceeded to negotiate with the opposition to raise the debt limit).

According to Shikshak, in the last 70 years that the current budget approval system is in place, the loan limit has been increased 78 times, which once again will not be an exception.

In looking at what could happen if the debt ceiling is not increased and the United States enters default, Professor Youche mentions that this would be an unprecedented event, for which he believes this country is at risk. Even the political parties ofThe seriousness of not reaching an agreement, as not only the country’s economy, but also the global economy will be affected“, he explained.

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What is closer and possible than a default is the delay of the agreement because the approval is not required to be met on the first date, But the following debates will be discussed in the coming weeks.

Usche explains that if a consensus is not reached, President Biden will have to reorganize the budget by prioritizing debt payments, interest, delaying some payments such as public employees, veterans, teachers.

,It has also been said that if the hike is not done, the US will find itself in a situation where its securities will lose their historical character of being risk free, leading to a decline in its GDP.”, the academic pointed out.

Due from 1 june

The United States Congressional Budget Office (CBO) warned that the country could find itself in default as early as June if an agreement is not reached between Democrats and Republicans to raise the debt ceiling.

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It should be noted that currently, according to the federal government the debt ceiling is around US$31 trillion.

Similarly, according to the information received from the AFP agency, The Treasury Department has already given June 1 as the date for a possible default.

According to the CBO forecast, if the debt ceiling remains unchanged, there is a significant risk that sometime in the first two weeks of June, The government can no longer pay all its debt obligations.

,The ability to finance ongoing government operations will remain uncertain through May, even if the Treasury finally runs out of money in early June.”, he pointed out.

Nation World News Desk
Nation World News Desk
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