US bankruptcy imminent: ‘It shouldn’t happen’
For weeks, American politics has been under the weight of impending bankruptcy. Since the US debt is very high, default is imminent. In utter desperation, policymakers are trying to raise the debt ceiling, but analysts still predict that the US will default in June, which means that the country will default on its debt.
If the United States is labeled as defaulting, it will have dire consequences for the international financial system, BlackRock Vice President Philip Hildebrand predicts. “This is not something you want to mess with,” he warns. Hildebrand, who is also a former head of the Swiss Central Bank, hopes to address the problem in due course. He argues that if the US defaults on creditors, that is a “bullhole” that could threaten the financial system. “It can’t happen.”
Read also | The United States is on the verge of bankruptcy
Republicans want to get rid of Biden’s horses
So US President Joe Biden wants to raise the debt ceiling. But Republicans simply don’t want to get involved. So they ask for changes in budgets. House Speaker and Republican leader Kevin McCarthy introduced a plan proposing a $130 billion cut. On the other hand, the debt ceiling will be raised by one and a half trillion dollars.
Read also | Biden wants $850 billion for defense
Republicans in particular want to scale back plans on which Biden wants to project himself. This relates to climate plans, health care and Inflation Reduction Act Where conservative politicians want to cut spending. Republicans also want to cancel the plan to cancel a large portion of American student debt. But the White House has criticized the plans, saying House Republicans are “holding the American economy hostage.”
However, US Treasury Secretary Janet Yellen wants to take “extreme measures” before the beginning of June to prevent bankruptcies. The debt ceiling is currently $31.4 trillion. However, the United States actually benefited from this amount in January, but a financial trick enabled it to build up a reserve of 800 billion US dollars. However, the Americans could not repeat this trick again. Sometime this summer, the US will still be touching the ceiling. As a result, the United States can no longer pay interest on outstanding debts, for example. Also, money can no longer be spent on government officials, money for health care and social services.
“Travel enthusiast. Alcohol lover. Friendly entrepreneur. Coffeeaholic. Award-winning writer.”