Translated material
Goodbye, default!
US default is canceled. Republicans with the Democrats nevertheless came to consensus. However, the US public debt as a whole is not so great as to break the largest economy of the world overnight. Although this status itself makes us follow it, since the consequences of her problems will be felt everywhere.
The default of the United States of America is postponed indefinitely. On July 31, President Barack Obama announced that an agreement with the Republicans to raise the level of public public debt has been reached. “The members of the Congress performed a lot on this issue, but I finally want to say that the leaders of both parties, both chambers of the Congress, have reached an agreement that will reduce the budget deficit and prevent default, which would have a destructive effect for our economy,” Obama said.
The United States overcame the next ceiling on May 16. Then the Minister of Finance Timothy Gatener announced in Congress that the debt level was exceeded and his department would have to apply “accounting tricks” to pay for obligations. The Obama Administration was demanded to increase the debt limit from $ 14.3 trillion by 2.4 trillion. Otherwise, the authorities would be forced to declare default. The Hour X had to come on August 2. In mid -July, Obama even threatened that the state could not pay pensions to 27 million pensioners.
Republicans demanded that the government reduce budget expenditures. The democrats generally acted “for”, but it was believed that the condition of the budget expenditures should also be increasing taxes for the rich. This did not suit the Republicans. As a result, the parties showed phenomenal intransigence, despite the fact that it was a national economy.
Illustration: Sergey Elkin Even Internet technologies were thrown into battle. Barack Obama turned last Friday through Twitter to more than 9 million subscribers, urging them to influence the Republican congressmen from their states and thus solve the US debt problem.
The reduction of government departments will nevertheless happen. The administration promises to reduce expenses that are carried out through its regulatory acts by 1 trillion over the next 10 years. Moreover, both defense and civilian.
In disputes about default, which even alarmed even Russians (we already remember the terrible default of 1998!), The main component is political. As for the economic component, the default is not such a nightmare. Firstly, technical default does not mean indispensable bankruptcy of the United States. Secondly, the US public debt, although it has long turned into a political problem, remains at a completely acceptable level. The American GDP is the amount of about 15 trillion dollars. And the debt as of April was 14.4 trillion - about 96 percent of GDP. The main US creditors are China (it accounts for about a quarter of the debt) and Japan (20 percent).
True, debt continues to increase. According to preliminary forecasts, in 2011 it may exceed GDP, and by 2014 to reach almost 110 percent of GDP.
Only at rumors about the protracted negotiations and the likely default, the prices of gold beat records, reaching $ 1,600 per ounce. For every negative news, markets from Asia to Europe were in a decline. Their last news, however, immediately returned to the vigorous mood of the spirit.
Other consequences are simply difficult to forecast. The world can fall into a long recession. Domino effect may begin and begin to fall the already problematic economies of European countries. There may be many unpleasant consequences. Therefore, the whole world in tension monitors the development of the situation in the American economy - the largest economy in the world.
Therefore, the achievement of democrats agreements with the Republicans in terms of national duty is the news, albeit not universal scale, but pleasant for world markets.