“US Government Races to Negotiate Debt Ceiling Increase amidst Potential Financial Crisis, Say Reports”

According to a report on the website of Australia’s “Sydney Morning Herald” on May 8, Biden will meet with Republicans including Speaker of the US House of Representatives McCarthy at the White House on the 9th to negotiate an increase in the government’s debt ceiling. The meeting is expected to avert a brewing financial and economic crisis with global ramifications.

The report cited a warning from the U.S. Treasury Department that the U.S. could default on its debt as early as June 1 if no deal is reached. Financial market participants are taking the prospect of a historic U.S. government debt default with growing seriousness as Biden feuds with the Republican majority in the House of Representatives.

The report pointed out that if the market’s confidence in US treasury bonds is shaken or even lost, it may affect the global financial market, causing confusion and losses.

The mere prospect of being on the verge of a debt default could damage the credibility of the U.S. bond market and the dollar, prompting a flight from them.

According to the Associated Press report on May 8, so far, neither the Democratic President Biden nor the Republican House Speaker McCarthy has made any concessions. Biden wants to raise the government’s $31.4 trillion statutory debt ceiling so the federal government can keep paying its bills. McCarthy and other Republican lawmakers want a deal that secures trillions of dollars in spending cuts before signing off on raising the debt ceiling.

According to a report on the website of Germany’s “Handelsblatt” on May 9, the outside world believes that there are many signs that the ending will be as usual: when all parties make enough noise and dominate the media, the bipartisan parties in the United States will be in conflict. With a last-minute budget compromise, the government debt ceiling, already above any pain threshold, will be raised again.

There will be no embarrassing government shutdown or a devastating U.S. default that would rock financial markets around the world.

Still, this repeated farce is no match for America’s status as a leading economic power, and the mere debate over the debt ceiling has damaged the credibility of the largest economy.

The US “Washington Post” website reported on May 7 that the confusion in public opinion can be explained by many factors, including the social aftermath of the pandemic and economic panic. But there is strong evidence that at the heart of what is unsettling the American public is a pervasive sense that politics is no longer normal.

“Normal” means no one will threaten the U.S. and global economies by using the debt ceiling to secure unpopular political concessions, the report said. Of course, raising the debt ceiling usually sparks political conflict. But it wasn’t until a decade ago that Republicans (and only when a Democrat was in the White House) began trying to push the country to the brink by forcing spending cuts.

Original title: Using the debt ceiling as a partisan bargaining chip, foreign media: “American politics is no longer normal”