Monday, May 29, 2023

The US debt ceiling, what is it and why does it matter?

Written in the World on 5/25/2023 09:32 hs

Although the U.S. economy is not much of a concern, most people have forgotten about the debt and how it could affect the global economy.

Some experts point to the debt ceiling as “a key element of the American Nation’s fiscal policy management.

This is the legislative limit on the amount of public debt that the US Treasury Department can incur.

And although the US government has never had to keep the problems of solving the public debt, this time it is not a conflict of solution, but the convergence of the two political forces that support it: the Republicans and the Democrats.

In 2011, the situation is very similar to today

In other words, if these two parties fail to overcome their polarization to reach an agreement, a possible non-commitment by the US will have serious consequences.

Filch rating agency placed the debt of the United States, which has the highest grade (AAA) for firmness, on “negative watch” due to the lack of progress between the Democratic and Republican parties on a budget agreement that avoids the suspension of credits. .

The deadline is July 1 to resolve the problem and pay the funds to cover government expenses and to meet financial obligations, and thus not default.

Dangers to the world economy

If there is no deal, the United States would lose its trust in the world economy and be a rock in the stock market around the world.

Indeed, Joe Biden and the leader of the Republicans in Congress, Kevin McCarthy, have stated that the suspension of pensions is not an option and moving forward, but the situation seems to be stuck, since the president refuses to accept the demands of the opposition. within a year

President Joe Biden and the leader of Republicans in Congress, Kevin McCarthy, in a meeting to resolve the Debt Ceiling.

On the other hand, Republicans want the White House to accept radical cuts in public spending, while President Joe Biden (Democrat) has not yet completed the final plan to pay off the debt ceiling.

Nation World News Desk
Nation World News Desk
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
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