At present, the topic of America’s biggest discussion in the whole world is that America will go bankrupt due to its debt crisis? If America, which considers itself the only superpower of the world, really goes bankrupt due to its debt crisis, then what will happen to the rest of the world? How big this crisis is for America can be understood from the fact that President Joe Biden came straight back to Washington after attending the Hiroshima meeting of G-7 countries while he also had to go to Australia to participate in CAD. But looking at the country’s debt crisis, he has come back to America, because in any case, this crisis has to be resolved by June 10, 2023, otherwise America will not be able to pay its debt on time as promised.
The question is that if America will not be able to pay some installments of its debt or will be a little late in paying it, then why will the world suffer so much financial loss in this? Why should the world be worried about this personal concern of America? America will not be able to repay its debt liability on time due to its financial crisis. The financial credibility of the whole world will collapse. The reason for this is that most of the world’s big banks buy bonds from the central bank of America and due to those bonds, they assess and realize the strength of their economy. Once America defaults in paying the loan installment, then the whole world’s financial system will lose faith in American bonds and the financial system will collapse.
Don’t make the mistake of considering this crisis of America as a crisis like Sri Lanka or Pakistan or Lebanon. America’s problem is not that it does not have a balance of payments position. His problem is that the total annual budget of America is about 6500 lakh crore dollars. But American governments usually spend much more than their annual budget and then take the approval of the Parliament to meet this increased expenditure and increase the limit of their expenditure. Usually American governments do the same.
Every year they have to do the same. When there is a majority in the Parliament of America also of the same party, whose government is there, then there is no problem. But when the government is of some other party and the majority in the parliament is of some other party, then this crisis arises. Every time the US government has to rely on the Parliament to meet its increased expenses and only with the help of the Parliament it can increase the limit of its expenditure. Due to lack of majority in the House of Representatives, the US government is in trouble. Biden is constantly talking to the Speaker of Parliament, Kevin McCarthy, that he should be approved for the debt ceiling in any case. Bill should be passed for the loan in simple language. If this does not happen, the US government will default on many of its liabilities and will prove to be a defaulter.
If this really happens to America, then there can be an economic crisis in the whole world. The US stock market may collapse and fear may set in the minds of investors, which may lead to a cash flow crisis. Since the Republican Party dominates the Parliament and if House Speaker Kevin McCarthy does not cooperate, a big problem can arise. Since Kevin McCarthy of the Republican Party is influenced by former President Donald Trump and Trump does not want McCarthy to cooperate with Biden.
America currently has a debt of $ 2,489 trillion, which is almost five times as compared to 2001. In the last 20 years, there has been an increase of up to 500 percent in the arbitrary expenditure of the American governments. It has been happening continuously in America for the last 50-60 years, but governments find a solution to this crisis at the last moment. The domestic foreign debt that has been imposed on America has become 1/25 times of the total GDP of America, that is, the debt on America is more than 125% of the GDP of America. A psychological panic emerges from this debt, it is enough to put the whole world in trouble.
-Narendra Sharma
