Monday, May 29, 2023

Economists say, the nation/scenario of a possible default in the US will be resolved

Whereas The clock is ticking on a possible US default, with Democratic President Joe Biden and Republican negotiators trying to stop it on Tuesday With budget agreement. White House negotiator and Republican House Speaker Kevin McCarthy plan to continue talks after Monday’s interview between their respective leaders.

Biden and McCarthy called their meeting at the White House “productive” and although it did not lead to an agreement, it at least allowed them to set their respective boundaries. In nine days, the United States risks finding itself in the unprecedented position of not being able to pay its debts, A dangerous situation for a first world power.

If Congress doesn’t increase the government’s borrowing capacity by then, Biden may be unable to pay officials, pay social benefits and repay some creditors. bankruptcy of the united states impact on the world economy, It will create panic and recession According to analysts, this will spread to the world economy.

To increase borrowing power -currently over $31 trillion-, Republicans demand spending cuts from Biden. Democrats are prepared to reduce spending, but disagree with Republicans on how to do it.

The White House would like to tax the richest and biggest companies, with higher taxes, without touching social benefits or the president’s big investment projects. In short, increase the revenue of the federal government. On the other hand, Republicans prefer to cut public spending.

commitment, according to the American press, can be found in certain budget lines, a redistribution of funds earmarked for combating covid and a cap on some spending, the duration of which is the subject of bitter debate. Time is short, especially because this isn’t just about Biden and McCarthy compromising on each other.

As Biden put it, both would have to “sell” the deal to their respective parties., so that they get it approved in two chambers of Congress. Democrats control the Senate by a narrow margin and Republicans hold a majority in the House of Representatives. Democratic senators considered to be from the progressive wing and Republican legislators aligned with Donald Trump have already demanded maximum firmness from their respective leaders.

A US default could change the tone of the campaign for next year’s presidential elections, Biden, who is seeking re-election at the age of 80, is fighting to win votes with promises of prosperity and social justice. A recession would sink his already weak approval rating. His predecessor Trump, the favorite in the Republican primary, asked his people not to let the White House “bend” on the debt issue.

Nation World News Desk
Nation World News Desk
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