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2023-05-01 21:29:36
If Republicans and Democrats fail to agree to raise the debt ceiling for the United States, the country might find itself in default as early as June 1, Treasury Secretary Janet Yellen warned on Monday, who fears a “economic and financial disaster”.
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2023-05-01 21:29:36
THE UNITED STATES have come a little closer to a potential default on their public debt following collecting less taxes than expected, thus advancing towards the moment when the country will no longer be able to meet all its obligations, warned Monday, May 1 US Treasury Secretary Janet Yellen.
In a letter addressed to the Republican President of the House of Representatives, Kevin McCarthy, and made public by the Treasury, Janet Yellen indeed estimated that the debt wall might be reached “as of June 1”. “Our best estimate is that we will no longer be able to meet all government obligations by early June, and potentially as early as June 1,” she wrote to the Republican leader.
This does not mean a default as of next month, but the United States, which until now had been able to avoid closing services by playing on the various accounting lines, would find itself this time in a much more precarious economic situation.
In concrete terms, the Treasury would be forced to choose between its various constrained expenditures, which might force it to severely limit some, in particular those relating to health or retirement benefits, in order to be able to continue to fulfill its obligations relating to its future maturities related to its debt.
“It is impossible to predict with certainty the exact date when the Treasury will no longer be able to pay government bills and I will continue to update Congress in the coming weeks as information becomes available,” added Janet Yellen.
In a statement, the Congressional Budget Service (CBO) confirmed the Treasury’s estimates, saying that “to the extent that the income reporting campaign has been weaker than initially anticipated, we now estimate that there has a significantly higher risk that the Treasury will no longer have the necessary funds from the beginning of June”.
The US Congress must regularly vote in order to raise the debt ceiling of the federal state, a procedure carried out 78 times since the beginning of the 1960s, most often without any particular debate.
But this year, the Republicans, who have had a slight majority in the House since the beginning of 2022, refuse to grant what they consider to be a blank check in favor of the administration of President Biden and want instead that an increase in this ceiling is coupled with a drastic cut in federal spending.
However, the federal government reached its ceiling of 31,000 billion dollars in mid-January, forcing the Treasury to take a first series of measures, above all accounting, in order to remain at the level reached.
On the side of the White House, Joe Biden repeated on several occasions that the raising of the ceiling should be carried out unconditionally, considering that the debt was the result of the policies carried out in the past by all the administrations, from both parties. In a press release, the presidency announced that Joe Biden called Kevin McCarthy on Monday to invite him to a meeting on Tuesday, May 9, in the presence of the main Democratic and Republican officials in Congress.
Last Wednesday, the House of Representatives passed a text proposed by Kevin McCarthy providing for a $4.5 trillion cut in federal spending over the next ten years in exchange for an increase in the ceiling of 1,500 billion, or a review clause on March 31, 2024, which would therefore make the debt one of the main themes of the presidential campaign for the elections November of the same year.
After the publication of Janet Yellen’s letter, the Republicans’ Twitter account in the House also recalled that “the ‘Limit, save, grow’ law will limit Washington’s reckless spending.” The text is unlikely to be voted on by the Senate, controlled by the Democrats by a slight majority.
“It’s time to put partisan interests aside and do what’s right and necessary for the American people and avoid the first government default that would crash markets, raise costs for families and challenge their lives. savings for retirement,” Democratic congressional leaders Chuck Schumer (Senate) and Hakeem Jeffries (House) said Monday in a joint statement.
The two parties must, however, reach an agreement quickly: the current parliamentary session provides for only 12 days of debate on Capitol Hill between now and June 1. A default “would cause an economic and financial catastrophe”, warned Janet Yellen on April 25.
With AFP
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2023-05-01 21:32:13
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As semiconductor exports halved, the decline in exports continued in April.
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The trade deficit has also continued for 14 months in a row, but the deficit is narrowing little by little.
This is Reporter Lim Hyun-joo.
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Last month, exports recorded $49.62 billion, down 14.2% from the same month a year ago.
Again, semiconductors caught on.
Only semiconductor exports fell by 41%, largely due to a decrease in price and demand at the same time.
Fortunately, exports of automobiles and ships have increased significantly.
In particular, as exports of high-priced eco-friendly cars increased, car exports exceeded $5.5 billion for three consecutive months.
Imports from energy such as crude oil decreased last month to $52.23 billion, down 13.3% from a year ago.
The trade balance recorded a deficit of $2.6 billion in April as imports exceeded exports.
It was the 14th consecutive month of deficit, the longest since May 1997 when it recorded a trade deficit of 17 months in a row.
Fortunately, the trade deficit has been improving since January.
[주원/현대경제연구원 경제연구실장]
″Imports are decreasing rather quickly, so the trade deficit will decrease and it is highly likely that it will return to surplus sooner or later. Exports still seem to be a bit uncertain.″
In order to break the chain of sluggish exports, the semiconductor industry must revive, and the industry expects Samsung Electronics’ participation in production cuts to reduce inventory and slow down the price decline from the second quarter.
Taiwanese market research firm TrendForce also predicted that the problem of oversupply of memory semiconductors would improve following the third quarter.
Here, the timing of China’s economic recovery is also a variable.
The government also said that it expects some semiconductor exports to recover in the second half.
This is Im Hyun-joo from MBC News.
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2023-05-01 18:55:37
Alexandra, 46, an IT consultant, has already come to demonstrate in March. She is here today “because of 49.3, because [comme] I started late, I will finish late”. “And there, I took the quiet procession along the Boulevard de la République. And I came to see here, at Nation, how it ends. I don’t know how it’s going to end… The union leaders seem more competent than the political leaders and that’s serious”she explains. “There, I find that it is more violent than the one I did in mid-March. » She does not recognize herself in the songs once morest the police. In 2022, she voted Fabien Roussel, “because he’s nice”and blank in the second round.
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#demonstrations #brought #ten #times #people #backdrop #protests #pension #reform
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