US President Joe Biden wants to use all his might to prevent his government from paying. “We as America are paying our debts,” Biden said in a speech yesterday in Springfield, Virginia.
The backdrop is a political dispute between Biden’s Democrats and Republicans over raising the US debt ceiling, which could also plunge the global economy into crisis. The applicable debt ceiling was reached last week.
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America cannot borrow to pay its bills. Although America is not yet bankrupt, it is only a matter of time if political agreement between the camps is not reached. A default in the world’s largest economy could trigger a global financial crisis and economic downturn.
Biden warned that the idea of such scenes is incomprehensible. He said he would not engage in reckless threats to hold the economy hostage and weaken the country internationally.
In the United States, Congress sets the debt ceiling at irregular intervals and determines how much the state can borrow. With a new majority in the House of Representatives, Republicans are now threatening to raise the debt ceiling only under certain conditions — in exchange for social sector cuts, for example. On the other hand, the White House cautions against political tactics on this economically important issue.
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