In a few weeks, the US will be threatened with insolvency. The bailout debt ceiling hike is stuck in the US Congress – and a bankruptcy could plunge global markets into chaos.
The Washington government is at risk of default in the first two weeks of June unless the debt ceiling is raised, according to estimates by the independent budget bureau of the US Congress. If the benchmark is not revised upwards, there is a significant risk that the government will not be able to meet all of its obligations, the Congressional Budget Office said Friday.
If the debt ceiling is not raised or suspended before Treasury reserves are exhausted, the government will have to delay payments for certain activities, default on its debt obligations, or both.
However, should the so-called extraordinary measures taken by the Treasury Department until June 15 suffice to fund government affairs, the expected new tax revenues could provide some leeway. Then there is a threat of non-payment until the end of July.
US Treasury Secretary: Would “seriously harm global economy”
Recently, Treasury Secretary Janet Yellen warned that such a failure was possible as early as June 1. Recently, Treasury Secretary Janet Yellen warned that such a failure was possible as early as June 1. She said ahead of the meeting of G7 finance ministers in Japan on Thursday: “The idea of defaulting on our debts is something that would hurt the US and the global economy so much that I think it is considered unthinkable by everyone. would be considered.”
In the United States, Congress sets a debt ceiling at irregular intervals and determines how much money the state can borrow. The current debt ceiling has now been reached in the US and the US Treasury Department has to draw on the reserves – because the US is no longer allowed to take on debt to pay its bills.
To raise the debt limit, US President Joe Biden’s Democrats need the Republicans in Congress. However, they oppose and demand cuts from Biden, for example in the social sector.
Biden attacks Republicans
The US president accuses Republicans that carrying out “their wish list” could cost thousands of jobs. For example, according to Biden, “firefighters, national park rangers, and workers regulating water quality” would be affected.
A first high-level meeting of party leaders at the White House ended Tuesday without result. Another meeting scheduled for Friday has been postponed to next week.
Insolvency would have global consequences
A bankruptcy of the largest economy would have devastating consequences for the US and the global economy. Major US banks warn of ‘panic’.
Source: Krone
I am Wallace Jones, an experienced journalist. I specialize in writing for the world section of Today Times Live. With over a decade of experience, I have developed an eye for detail when it comes to reporting on local and global stories. My passion lies in uncovering the truth through my investigative skills and creating thought-provoking content that resonates with readers worldwide.
