Fears rise over spectre of US debt default
In the United States, a deadline is fast approaching for the government to raise the country’s debt limit. In just under three weeks’ time, on 2 August, the US could start defaulting on its debt obligations if Congress doesn’t raise the debt ceiling.
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US President Barack Obama has been staging daily meetings at the White House to come up with a solution to the problem.
US Congressional leaders from both sides of the aisle are spending up to two hours a day with the president to come up with a way to raise the debt ceiling and reduce a ballooning deficit.
US debt right now stands at an almost inconceivable 14.3 trillion dollars. Washington needs approval from Congress to keep borrowing money. But the latest meeting on Thursday again ended in deadlock.
Spending cuts are needed as well as added revenue, but where to cut and where to add taxes, is proving a contentious issue. The idea of raising taxes is a nightmare scenario for
Republicans.
The debate has been a long time coming, but with a divided Congress, both sides are proving unwilling to budge.
The White House has promised the US will not default on its debt. But deadline day is edging closer.
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