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Fear of national bankruptcy is increasing in the United States

Fear of national bankruptcy is increasing in the United States

In the row over increasing the US national debt limit, ruling Democrats and opposition Republicans remain irreconcilable. Treasury Secretary Janet Yellen and Senate Democratic Majority Leader Chuck Schumer reiterated their claim Tuesday night that both parties should cap the two together. Prominent Republican politicians rejected this again.

President Joe Biden is threatened with a kind of technical national bankruptcy in December: The government will have to halt some of its payments to families, retirees, soldiers and international lenders because it would violate the legal debt limit when taking out needed loans. Since the last dispute just nine weeks ago, the limit has been $28.9 trillion. The Democrats’ problem is that they have either left the standoff with the opposition or they have to take responsibility for raising the debt limit on their own.

According to Yellen, all government benefits are guaranteed to be paid by December 15. Then, it would be critical—also because the Secretary had to funnel $118 billion into the Highway Fund that very day. The money, which is part of the government’s trillion-dollar infrastructure package, will be used to restore roads and bridges. Yellen has been using special measures for weeks to delay reaching the debt limit as much as possible.

The partisan divide reminds us of what the Americans did chicken game – Coward Game – Name: Two cars are racing towards the abyss, and the driver who jumps at the end wins. In October, it was Mitch McConnell, the Senate minority leader, who lost his temper and made sure Republicans cleared the way for a slight increase in the cap. This time around, it looks like Democrats will have to act on their own — deepening divisions between the camps. Senator Bernie Sanders has called Republican behavior “incredibly irresponsible.” This is even more true when it comes to debt “accumulated under the Trump administration”.