The Economist: national debt problem could force the United States into austerity
To avoid a default, the U.S. is trying to come up with various options to increase the debt ceiling and struggle with huge spending.
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A US default is not conceivable at the moment, but action to avoid it is becoming increasingly difficult, reports The Economist. The fundamentals for the US economy have become increasingly shaky over the years, and markets may react differently to such events.
On 19 January, Treasury Secretary Janet Yellen announced that the national debt had reached a set ceiling of $31.381 trillion, and the US Treasury has already begun to apply ‘extraordinary measures’ to win a few months for policy discussions.
The publication notes that previously proposed methods to save cash, such as deferring the investment of pension funds, may provide an opportunity to delay default for several months.
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The Economist: national debt problem could force the United States into austerity