Washington-SANA
Amidst strongly worded warnings issued by US Treasury Secretary Janet Yellen of the serious repercussions and consequences that may result from delay in taking appropriate measures, the contest over the accumulated sovereign debt of the United States returns once again to the congressional arena.
The United States exceeded the maximum borrowing ceiling set at $ 31.4 trillion last Thursday, which reflects the amount of money that the US government has already spent and prepares the ground again for a confrontation in Congress between the Republicans and Democrats that could end, according to the words of the American “CNBC” news network, with financial problems. It affects not only the American economy, but every family in the country.
Yellen warned yesterday, according to what was reported in the media, that the possible inability of the United States to pay its debts could cause a global financial crisis, and undermine the role of the dollar as a currency for reserves, and she also informed congressional leaders that her ministry began to use exceptional measures to manage liquidity that could avoid the country risk. Failure to pay until the fifth of next June.
And while Yellen confirmed that this situation may lead to many people losing their jobs and higher borrowing costs, the White House refuses to negotiate with hard-line Republicans about raising the debt ceiling, because it believes that many of them will eventually back down from their demands.
US President Joe Biden's attempts to raise the US debt ceiling collided with the rejection of the Republican majority in the House of Representatives, which in turn is trying to push for negotiations with the White House to reduce government spending in return for raising the sovereign debt ceiling.
Sovereign debt is the amount of money that the US Treasury is allowed to borrow to pay bills for the US government's obligations, including Social Security, Medicare and military salaries, as well as interest and tax refunds.
And since the United States has now exceeded the current sovereign debt ceiling of $31.4 trillion, it is unable to increase this debt and pay the bills accumulated on it.
Mark Hamrick, an economic analyst at Bankrate, explained that the US government relies on debt to finance its obligations, and like many American families, it does not have sufficient income to finance its expenses.
Economists explained that the expected confrontation and the increasing warnings of the United States reaching the sovereign debt ceiling are all due to the fear of debt default, and this default occurs when the government is unable to pay its financial obligations, which leads, according to economic analyst Mark Zandi, to “dangerous repercussions that cause a state of Chaos in the financial markets and completely undermine the US economy, and lead to shocks in global economies.
America's debt until last Saturday amounted to 31.38 trillion dollars, meaning that it quickly began to exceed the maximum allowable debt, and this in itself represents a catastrophe for the United States, as it is approximately 130 percent of its gross product and the burden of paying it will be distributed among all Americans, large and small.
The ongoing congressional disagreements between Republicans and Democrats over most domestic and international issues are steadily exacerbating, but the issue of resolving the sovereign debt problem and raising the public debt ceiling will once again represent a harsh turning point in the course of political fragmentation that the United States is witnessing in an unprecedented manner these days, and this will be directly reflected On the US economy, which is still suffering from the Corona pandemic and the massive spending on the US involvement in Ukraine, it will also carry a sufficient amount of repercussions on the financial and global markets.
Basma Kannon
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