“We are threatened by a financial crisis like 2008”

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The number is unbelievable: $31,459,627,607,365 – over $31 trillion. That’s how high the mountain of debt in the US is – and it’s growing every second. It’s been 22 years since the US last reported a positive state budget.

The debt ceiling has been reached, America now has to take advantage of its reserves. It’s an unsustainable situation. This is why US Treasury Secretary Janet Yellen (76) has long warned: The world’s largest economy is under threat of bankruptcy.

7 million jobs are under threat!

The economy is threatened by severe turbulence if the US debt ceiling is not raised soon, economic analyst Mark Zandi of ratings agency Moody’s said on Tuesday. “This means chaos for the financial markets, the stock market, the bond market, the foreign exchange markets.”

Zandi spoke in an alarming tone before a committee in the US Senate. A recession is certainly expected. He gave August 18, 2023, as the deadline. He warned that the US government would go bankrupt if the debt ceiling was not raised by then. “There is only one solution, namely raising, suspending or removing the debt limit by mid-August,” he said.

Zandi becomes even clearer and more concrete in his analysis cited by The New York Times. A default could trigger the loss of seven million jobs and a financial crisis like 2008. “In this case, we are facing a financial crisis,” write Zandi and colleagues.

No deal in sight

In the US, Congress sets a debt ceiling at irregular intervals and thus determines how much the government can borrow. So far the limit is around US$31.4 trillion. Meanwhile, in the US, the current debt ceiling has been reached and the Treasury Department has to tap into reserves because the US is no longer allowed to borrow more to pay its bills.

But some conservatives among Republicans in the House of Representatives are blocking the issue, and there is no sign that a deal has been reached with President Joe Biden’s (80) Democrats. The independent budget office of the US Congress recently estimated that a payment default was imminent between July and September. (nim/SDA)

Source :Blick