Source: Report
Author: Wu Fangming
The upper limit of the US federal debt is about to expire and the deadlock of the two -party negotiation of Congress, which involves the risk of possible breach of contract, is no longer novel, but a series of farces that will repeat repeatedly in two or three years.The nerves are also closely related to the chips of the US political parties and the wrestling of the election.
Looking back at history, the US government has adjusted the upper limit of debt to 108 times, and the most recently increased was October 2021.Another way to deal with is to suspend the upper limit of debt, that is, during the period when the amount of borrowing exceeds the upper limit is briefly allowed, this method has been rarely used in 90 years after the Congress of Congress set up in 1917, but since 2013Seven times, an agreement is usually reached one day before the breach of contract to avoid being caught in a catastrophic potential debt default.These methods can avoid debt reverse, but the long -term effects and side effects.
The US government's long -term finances cannot be eased, and the larger and bigger, the debt is used to issue bonds. By October last year, the US debt has accumulated to $ 31 trillion (41 trillion yuan).The 31.4 trillion dollars, the "X Date" of the breach of contract will be as soon as it is early next month, the latest August.That is, the "Normandy Login" effect of the siege of the US sovereign debt defaults to the potential risks of the United States is imminent.
U.S. Treasury Secretary Yellen will have a vocal warning almost every day. US debt defaults will cause domestic economic and financial disasters. It will also lead to a global economic decline and may weaken the United States' global economic leadership.
U.S. government provides regular US debt to enrich the treasury and provide daily operations. The upper limit of the debt makes the Ministry of Finance from selling more US debt.The cash balance of the U.S. Treasury has decreased by half from the US $ 316 billion earlier earlier this month.Essence
After 2001, the U.S. government has an average of nearly $ 1 trillion budget deficit each year. With the expenditure of the salary, it avoids the debt -limited alarm clock.
In 2013, the U.S. debt limit negotiations forced the US government to close the door for more than two weeks in October of that year, and more than 800,000 federal employees were forced to take a holiday.Maintain basic services and supporting social benefits and medical subsidies.
If the debt is default, the risk is very high, and the losses and credit of the huge economy may follow.First of all, the letter -rated institution will reduce the US public bond rating. In 2011, the S & P 500 Index fell nearly 20%within a few months and removed the AAA rating.
Secondly, the cost of lending and loans of the government, enterprises and people has risen, and consumer confidence and expenditure will decline, resulting in a greater dilemma such as increased unemployment rates, decreased corporate profits, and decline in asset prices.Under the weak economic weakness, the possibility of hard landing.In addition, the global US debt is not even loses or even caused global financial panic due to liquidity or even selling.Yellen also warned that debt reversing will deduct the US dollar as the role of global reserve currency.In this way, the world's only dominant position of credit, trade and reserves of credit, trade and reserve will be challenged, and then strengthen the force of "de -US dollar".
US bonds have the status of "Dinghai God Needle" in the financial market. At present, it has a size of 24 trillion US dollars. It may be imagined that the consequences of debt reverse.Moreover, it is expected that the annual deficit from the Ming Dynasty to 2033 is nearly more than $ 2.7 trillion, and the cumulative deficit of 10 years will exceed $ 20 trillion.It can be seen that the debt limit will be a long nightmare around the United States and the world.
The founder of Bridge Water Fund Dario has a god metaphor for the upper limit of US debt, known as the "Dario wine ghost theory". He said that "the upper limit of the US bonds is like a farce.Come to execute drinking restrictions, but when they meet the restrictions, the alcoholics will conduct a funny negotiation and temporarily eliminate the restrictions so that they can continue to drink until the next limit, then they will go through the next funny negotiations,Then continue the carnival. "
Like the alarm clock regularly, it is like a farce. The United States two parties in the United States are playing a political Boyi game with calculations. Is the alcoholic be a real alcoholic or crazy?Is the first sovereign debt default in history, regardless of economic storms in the United States and the world?The world is watching this designated drama. There should be answers in the hearts of the two parties in the United States, but the play will continue?
