Emergency Cash-Saving Measures Enacted to Stop US From Defaulting on Trillions in Debt

[Piotr]

Emergency Cash-Saving Measures Enacted to Stop US From Defaulting on Trillions in Debt
16:32 GMT 02.08.2021

Congress pumped over $6 trillion in cash into the economy over the past year-and-a-half in response to the coronavirus pandemic, with the federal debt reaching over $28.5 trillion in June. Combined US debt, which includes federal liabilities plus other public and private obligations, stands at over $85 trillion, or four times the US’ annual GDP.
The Treasury Department moved to invoke “extraordinary measures” on Monday after Congress failed to agree to extend the suspension of the debt ceiling before departing for its six-week vacation.
According to CNBC, the emergency cash-saving rules stepped into effect on Monday, after the expiry of the two-year freeze on the debt ceiling limit at $22 trillion in August 2019.

From now on, the Treasury will be forced to avoid issuing new debt for between 60 and 90 days until Congress reconvenes and agrees to freeze the limit again or raise the ceiling. If lawmakers fail to do so after reconvening in September, the US, the world’s largest economy, could default on its obligations to domestic and international creditors, sparking a global economic collapse of a kind not seen since the 1930s.

Bloomberg fears a failure to freeze or raise the limit again could lead to a default as early as October, with lack of agreement among lawmakers also giving rise to the prospect of government shutdowns. If a deal cannot be worked out, things like social security and Medicare cheques, interest payments, and US military spending will stop coming.
Democratic politicians in the House promised to "address" the debt ceiling issue last week but provided no specifics, with House lawmakers John Yarmuth and Dick Durbin confirming that they had not worked out a concrete plan for dealing with the issue. Theoretically, Democrats could use their marginal House and Senate majorities to push through a decision on the debt ceiling without Republicans in a process known as reconciliation. Another option is to negotiate with the GOP in exchange for a compromise on a budget item or other piece of legislation that the Republicans want to pass.

Last week, Treasury Secretary Janet Yellen penned a letter to House Speaker Nancy Pelosi, urging Congress to get the debt ceiling issue resolved before 2 August, either by raising it or extending the suspension. In her letter, Yellen warned that the current problem had been “exacerbated by the heightened uncertainty in payments and receipts related to the economic impact of” the coronavirus crisis and the associated injections of pandemic relief into the economy.

The US has pumped over $6 trillion into COVID relief, adding to the country's debt, which reached $28.5 trillion in June. Federal debt surpassed the 100 percent of US GDP mark in the spring of 2020, with Fitch Ratings expecting it to hit 109+ percent by the end of the year.

Until now, unlike most countries, which suffer substantial inflationary penalties and the prospect of currency collapse if they pursue excessive money printing or accumulate too much debt, the US has long enjoyed a unique position as the emitter of the de-facto world currency, the dollar, allowing for decades of quantitative easing and spending beyond its means without fear of out-of-control inflation or concerns that investors could stop deeming debt as viable. In recent years, a growing number of economists, banks, and policymakers have expressed concerns that the current system can’t hold forever, and that the US debt bubble may pop, leading to a massive financial collapse which sparks a global depression.

https://sputniknews.com/business/20...stop-us-from-defaulting-on-trillions-in-debt/

What we are seeing now is death of the US Empire.

 

[xyxmt]

one day this will go down like house of cards and no one will know what hit them.

 

[Hamartia Antidote]

What we are seeing now is death of the US Empire.

LOL! The angry Iranian at it again.

This isn't anything new

Government shutdowns in the United States - Wikipedia

en.wikipedia.org

 

[Wine&Steak]

Emergency Cash-Saving Measures Enacted to Stop US From Defaulting on Trillions in Debt
16:32 GMT 02.08.2021


What we are seeing now is death of the US Empire.

I don't like to give advice, but I am going to here. Don't fall for Russian news, or even your own countries news about USA.
Disclaimer : I do have a vested interest in USA doing good, but worst case, I could always move to India.

(1) US can never default, The money borrowed is mostly internally(Social security/Pension funds, Bond funds etc... of the US 21T debt, only 25% is external debt.
(2) US debt is in US dollars. Imagine Argentina's debt was in Argentinian peso, they will just print and give the electronic credit. same with US dollars

(3) Most important point - The strength of US dollar is US production, specially high end. US produces & exports Medicines, food, seafood/fruits&grains, Movies & Music, Software & Hardware Tech. A small portion of US land can feed the entire world forever, it is truly a blessed fortunate land.

So betting against US or it's dollar is going to be many centuries unless there are internal fissures. It is blessed geographically with no enemy neighbours. People outside US cannot understand it's strength.

PS : Something still perplexing for me is why Iran thinks it can fight with USA (even China does not do this, at least openly). it is going to be a losing proposition, The GCC knows it.

 

[MH.Yang]

If the USA wants to prevent debt default, it can only find a country that can buy a lot of US debt, that is China. If the USA wants to stop prices from rising, it can only ask China to issue more money(Now the whole world is printing money, only China does not). This is why the USA is eager to negotiate with China recently now.
But trump set off a populist storm.Biden could not make some concessions in the Sino US negotiations because it would affect his personal political future.So China drove Sherman back directly.

China is not in a hurry, We have plenty of time.
In 2008, China saved the USA by buying U.S. debt and issuing additional currency, but we was not rewarded and even betrayed.. We won't this time.

Biden and trump are naive.They believe that detaining Huawei executives, sending warships to the South China Sea and using the media to fabricate rumors about Xinjiang can be used as chips for Sino US negotiations.But these things really won't hurt us.
On the contrary, these events have led to the loss of all supporters of the USA in China's public opinion. Those who supported the USA and accepted American values now begin to change their attitude and firmly support the Chinese government.
Such support will only lead the Chinese government not to make any concessions.

The recent two presidents of the USA, Trump and Biden, are far less capable than Obama.

Their stupid operation gave the most valuable chips in their hands (people in China who support American values) to the Chinese government. Only these people may make the Chinese government give in, Obama understands, but these two fools don't understand.

Now, China's domestic opinions are very unified, and the support rate of the Chinese government has reached 96%. How can the Chinese government give in with domestic support?
Does the USA think China is a country that can be defeated by external forces?

 

[ARMalik]

Emergency Cash-Saving Measures Enacted to Stop US From Defaulting on Trillions in Debt
16:32 GMT 02.08.2021

Congress pumped over $6 trillion in cash into the economy over the past year-and-a-half in response to the coronavirus pandemic, with the federal debt reaching over $28.5 trillion in June. Combined US debt, which includes federal liabilities plus other public and private obligations, stands at over $85 trillion, or four times the US’ annual GDP.
The Treasury Department moved to invoke “extraordinary measures” on Monday after Congress failed to agree to extend the suspension of the debt ceiling before departing for its six-week vacation.
According to CNBC, the emergency cash-saving rules stepped into effect on Monday, after the expiry of the two-year freeze on the debt ceiling limit at $22 trillion in August 2019.

Bloomberg fears a failure to freeze or raise the limit again could lead to a default as early as October, with lack of agreement among lawmakers also giving rise to the prospect of government shutdowns. If a deal cannot be worked out, things like social security and Medicare cheques, interest payments, and US military spending will stop coming.
Democratic politicians in the House promised to "address" the debt ceiling issue last week but provided no specifics, with House lawmakers John Yarmuth and Dick Durbin confirming that they had not worked out a concrete plan for dealing with the issue. Theoretically, Democrats could use their marginal House and Senate majorities to push through a decision on the debt ceiling without Republicans in a process known as reconciliation. Another option is to negotiate with the GOP in exchange for a compromise on a budget item or other piece of legislation that the Republicans want to pass.

The US has pumped over $6 trillion into COVID relief, adding to the country's debt, which reached $28.5 trillion in June. Federal debt surpassed the 100 percent of US GDP mark in the spring of 2020, with Fitch Ratings expecting it to hit 109+ percent by the end of the year.

Until now, unlike most countries, which suffer substantial inflationary penalties and the prospect of currency collapse if they pursue excessive money printing or accumulate too much debt, the US has long enjoyed a unique position as the emitter of the de-facto world currency, the dollar, allowing for decades of quantitative easing and spending beyond its means without fear of out-of-control inflation or concerns that investors could stop deeming debt as viable. In recent years, a growing number of economists, banks, and policymakers have expressed concerns that the current system can’t hold forever, and that the US debt bubble may pop, leading to a massive financial collapse which sparks a global depression.

https://sputniknews.com/business/20...stop-us-from-defaulting-on-trillions-in-debt/

What we are seeing now is death of the US Empire.

Don't worry about the mighty US. They will simply print another 100-Trillion dollars on Toilet papers ! That is why the price of toilet paper has sky rocketed in the US cause there is none left for ordinary people !

 

[chinasun]

 

[Piotr]

Don't worry about the mighty US. They will simply print another 100-Trillion dollars on Toilet papers ! That is why the price of toilet paper has sky rocketed in the US cause there is none left for ordinary people !

Soon Muricans will use dollars as toilet paper because real toilet paper will be more expensive.

 

[VCheng]

What we are seeing now is death of the US Empire.

No, what we are seeing here is more trash from Sputnik News.

 

[TigerOfMysore]

As long as there is a healthy demand for US Treasury Bills, US will find the liquidity to fund itself. Also the US has massive upside potential for additional Taxation (both corporate and personal). Combine this with ability to reduce defense expenditure as well as reduce Medicare and SS benefits also gives the US a lot of room. And finally the fact that inflation is generally under control with a massive revival of economic activity means US will come out reasonably strong. The real challenge will come when the US reserve currency is shaken. Till then, the US economic engine has enough levers to pull it out of this slide.

The "debt default" is a red herring. It will not happen in the foreseeable future.

 

[hualushui]

https://www.usdebtclock.org/

 

[CIA Mole]

Emergency Cash-Saving Measures Enacted to Stop US From Defaulting on Trillions in Debt
16:32 GMT 02.08.2021

Congress pumped over $6 trillion in cash into the economy over the past year-and-a-half in response to the coronavirus pandemic, with the federal debt reaching over $28.5 trillion in June. Combined US debt, which includes federal liabilities plus other public and private obligations, stands at over $85 trillion, or four times the US’ annual GDP.
The Treasury Department moved to invoke “extraordinary measures” on Monday after Congress failed to agree to extend the suspension of the debt ceiling before departing for its six-week vacation.
According to CNBC, the emergency cash-saving rules stepped into effect on Monday, after the expiry of the two-year freeze on the debt ceiling limit at $22 trillion in August 2019.

Bloomberg fears a failure to freeze or raise the limit again could lead to a default as early as October, with lack of agreement among lawmakers also giving rise to the prospect of government shutdowns. If a deal cannot be worked out, things like social security and Medicare cheques, interest payments, and US military spending will stop coming.
Democratic politicians in the House promised to "address" the debt ceiling issue last week but provided no specifics, with House lawmakers John Yarmuth and Dick Durbin confirming that they had not worked out a concrete plan for dealing with the issue. Theoretically, Democrats could use their marginal House and Senate majorities to push through a decision on the debt ceiling without Republicans in a process known as reconciliation. Another option is to negotiate with the GOP in exchange for a compromise on a budget item or other piece of legislation that the Republicans want to pass.

The US has pumped over $6 trillion into COVID relief, adding to the country's debt, which reached $28.5 trillion in June. Federal debt surpassed the 100 percent of US GDP mark in the spring of 2020, with Fitch Ratings expecting it to hit 109+ percent by the end of the year.

Until now, unlike most countries, which suffer substantial inflationary penalties and the prospect of currency collapse if they pursue excessive money printing or accumulate too much debt, the US has long enjoyed a unique position as the emitter of the de-facto world currency, the dollar, allowing for decades of quantitative easing and spending beyond its means without fear of out-of-control inflation or concerns that investors could stop deeming debt as viable. In recent years, a growing number of economists, banks, and policymakers have expressed concerns that the current system can’t hold forever, and that the US debt bubble may pop, leading to a massive financial collapse which sparks a global depression.

https://sputniknews.com/business/20...stop-us-from-defaulting-on-trillions-in-debt/

What we are seeing now is death of the US Empire.

Nah US will keep printing to draw credit out of its national wealth of >$100 trillion.

It can probably print another $50 trillion or so before money supply/velocity makes inflation too unberable.