The United States is still on track to default on its debt obligations by the middle of October. The global economy could be sunk as a result of the resulting financial shockwaves. Despite the ongoing squabbles between Democrats and Republicans over debt and borrowing limits, Congress did manage to pass a short-term fix on Thursday night to avoid a federal government shutdown on Friday night. However, the threat of international repayment default remains, as the two parties engage in a dangerous political game of chicken.
According to Jacob Funk Kirkegaard of the Peterson Institute of International Economics, a US default, which would be unprecedented, would result in “complete chaos.” “It’s a bomb; you’re basically destroying the global financial system.” ”
Since its inception in 1917, Congress has routinely raised the debt ceiling – a limit on how much the federal government can borrow to service debt. But, with pаrtisаn аnimosity between Democrаts аnd Republicаns аt аn аll-time high, even on а criticаl issue like this, cooperаtion is dаngerously lаcking.