This week, the United States took a step back from the precipice of debt default and did not fall off the cliff for the time being. But in the view of Fox News, the United States has not fundamentally solved the problem of "debt out of control", but simply jumped from one pit to another. In this process, the two parties "pull to the limit", and the US debt continues to tear and expand like a leaky leather ball, which increases the risk of a US economic downturn.
On June 3, at the White House, President Biden signed into law the "Fiscal Responsibility Act" previously passed in Congress. The two parties in the United States have entered the "merit grabbing" mode ahead of schedule.
Senate Democratic leader Schumer: We got more votes in favor because the bill pushed back the worst parts of the Republican agenda.
Senate Republican Leader McConnell: Speaker McCarthy and House Republicans deserve our thanks.
On the evening of June 1, the bill narrowly passed the Senate.
California Sen. Padilla: In this vote, with 63 yes votes and 36 no votes, the 60 threshold was reached, and the bill passed.
The AP noted that few were happy with the bumpy deal, but most lawmakers believe the two parties could not agree on a better alternative before X-Day. This is the 103rd time since the end of World War II that the US Congress has adjusted the debt ceiling.
Bauer, chairman of the investment company: Today's market reflects a sigh of relief that we will not have a debt crisis.
Martin Wolff, chief economic commentator of the Financial Times, pointed out that the absurd farce created by the two parties in the United States has been repeated repeatedly, which not only seriously affects the credibility of the United States, but also greatly increases the possibility of the collapse of the financial system.
Ironically, in the House vote on May 31 night, Democrats voted in favor of it by a rare outnumber of Republicans, in contrast to previous Republican bills that have typically met with collective opposition from Democrats. Some Republican conservatives simply believe they have been "betrayed" by McCarthy.
Reporter: How confident do you have in McCarthy now?
Republican Rep. Bishop: No, zero. What is confidence based on? You can't give up the tools that bring the Republican Party together, you can't do that.
Reporter: Did the speaker lie when describing this bill?
Republican Rep. Bishop: yes, he's lying.
The "big tear" of the Republican Party has already shown signs. According to the agenda, before the full House can vote on it, the bill must first be approved by the House Rules Committee. The committee is composed of 9 Republicans and 4 Democrats, but there is "infighting" among the Republicans who clearly have the majority. Three hardline Republican conservatives were appointed to the Rules Committee in January when McCarthy's House Speaker vote was "stuck" and barely passed after as many as 15 rounds of voting. The appointment of these three hardliners to the rules committee with real power was seen as a compromise by McCarthy to win support within the party. Now 2 out of 3 people have attacked again.
Republican Rep. Ralph Norman: Not acceptable, I don't want it to pass. A bad deal is better than no agreement.
Republican Rep. Chip Roy: None of the Republicans should vote for this deal, it's a bad deal.
The media noted that the much-"spitted" agreement was initially reached on May 27 by Biden and McCarthy after weeks of intense negotiations, and the core content included agreeing to limit federal spending in fiscal 2024 and 2025 in exchange for suspending the debt ceiling until early 2025.
AP congressional reporter Groves: The bill is a compromise between a Democratic president and a Republican House speaker.
In the eyes of Fox News, Biden and McCarthy reached a typical Washington behind-the-scenes agreement, and now the US financial situation is very bad, and this debt agreement is completely unable to cope.
Since 1917, the US debt ceiling has been raised more than 100 times, and the debt ceiling negotiations between the two parties have always been a "political show", but now it is more like a "political ball", and the two parties are not only "tearing each other" but also "internal friction".
The New York Times believes that this exposes the "ugly side" of American politics.
Florida Governor DeSantis: Let me tell you, our country was facing bankruptcy before the debt ceiling deal was made, and it will still be facing bankruptcy after the debt ceiling agreement is reached.
The media noted that the "American bankruptcy theory" repeatedly emphasized by Florida Governor DeSantis is the same as the "Great Depression theory" proposed by Trump more than 2 months ago. At the time, Trump described Biden as a much-criticized "modern version of Herbert Hoover."
On June 1, 80-year-old US President Joe Biden accidentally fell at the Air Force Academy graduation ceremony, which is reminiscent of the US economy that is difficult to return.
Previously, on May 24, DeSantis officially announced his candidacy for the 2024 presidential election.
Florida Governor DeSantis: You just have to make a choice and don't let our descendants clean up the mess.
The New York Post believes that DeSantis's "mess theory" has hit both Biden and Trump, which can be described as killing two birds with one stone. The media noted that DeSantis, speaking about the debt issue, stressed that "the U.S. government has been spending too much money, at least since the late Trump administration." This is seen as "throwing the pot" at the same time at two former presidents. When it comes to how to resolve these issues, DeSantis said it is expected to be resolved in a second term if he is elected president.
In this regard, Trump said-for-tat on June 1 that Americans do not need to wait another eight years, he can solve the problem in six months. The media noticed that it took only 5 years from "loving father and son" to "turning faces and fighting".
When he ran for governor of Florida in 2018, DeSantis was labeled a "Trump apprentice." Today, the former "master and apprentice" are competitors. The US "Vox" news network believes that if DeSantis wants to win, what he needs is not to deny Trump, but to shape himself into an upgraded version of "Trump 2.0".
On the night DeSantis announced his candidacy, Trump also released a campaign ad, with the first three shots of DeSantis and the fourth shot of DeSantis and Biden, seemingly hinting at the toughest enemies inside and outside the party.
So far, nearly 10 members of the Republican Party have announced their candidacy. US media said that former Vice President Pence will also officially join the battle group on June 7. All kinds of complicated grievances and grievances make a vicious battle in the Republican primary inevitable.
Another candidate, Republican Senator Tim Scott, loudly called for Republican candidates to "show mercy" when they attack each other, because the black material that explodes with each other will become a "political weapon" for Democratic presidential candidates in the future.
In the view of India's Economic Times, even if there is a bipartisan agreement, it will only bring "temporary excitement", and the market will soon find out that this is actually "bad news", and the Fed has more reason to be confident about further interest rate hikes.
Reuters pointed out that after the debt ceiling impasse is suspended, the US Treasury is expected to issue a large number of bonds in a short period of time to quickly fill the empty treasury, which will suck out at least hundreds of billions of dollars in the market.
The U.S. Treasury is now running low in cash, leaving only $37.36 billion as of May 30. According to the Bloomberg Billionaires Index, 31 billionaires around the world are worth more than "Uncle Sam" (that is, the US government) has cash on hand, including legendary investor Warren Buffett and Silicon Valley iron man Musk.
McCluskey, head of the construction company: I'm very frustrated that politicians do your job and don't let other people take risks.
In Baltimore, Maryland's largest city, McCluskey's construction firm derives 60 percent of its revenue from government contracts.
McCluskey, head of the construction company: In the next 30 to 60 days, we will complete multi-million dollar projects, when will we get paid? I still have a lot of work to do in the second half of the year, provided that there is no economic catastrophe.
Chris, the average worker, was even more anxious.
Construction company worker Chris: When you have four people to feed, who knows what happens, but with a roof on your head and food on your belly.
The Federal Reserve's National Economic Survey released on May 31 showed signs of cooling in recent weeks. The US consumer confidence index also fell to a six-month low. Even the US government, which once shouted about "decoupling and breaking the chain", is not calm.
According to Fox News, the Biden administration is considering arranging a series of senior officials to visit China in the near future, including Treasury Secretary Yellen and Commerce Secretary Raimondo, the former involving US debt and the latter involving economy and trade.
And American business people have already taken a step ahead. On May 30, the day that Silicon Valley "Iron Man" Musk arrived in Beijing, Tesla's stock price rose, rising as much as 5%. Musk said that he opposes "decoupling and breaking the chain" and is willing to continue to expand his business in China and share China's development opportunities.
At a time when the countdown to the default of US bonds is entering and the risk of recession in the United States is increasing, Musk's visit is symbolic.
Coincidentally, the Wall Street Journal noted that in recent months, American entrepreneurs including Apple CEO Tim Cook and Starbucks founder Howard Schultz have visited China. Behind the "coming to China fever" is a "vote of confidence" cast in China's economy, which also fully shows that "decoupling" from China is unpopular.
On May 20, the US-led G7 summit threw out a new word.
European Commission President von der Leyen: I believe we have to de-risk, that is, focus on specific risks.
British Prime Minister Sunak: It's all about de-risking, not decoupling.
In the eyes of the New York Times, the phrase "decoupling" seems too strong, and "de-risking" only sounds mild. However, in the final analysis, it is still "old wine in new bottles", which is a strong word and "blinding method" of the hegemonic country United States to coerce other countries. In fact, it is the United States itself that abuses the hegemony of the dollar, pushes unilateralism, and disrupts the world order, which not only leads to its own debt thunder, but also forces the financial security of other countries to face the risk of being implicated.
Chinese Foreign Ministry spokesman Mao Ning: The real risks facing the world are camp confrontation and a new cold war, wanton interference in other countries' internal affairs, creating regional turmoil and chaos, politicizing economic, trade and scientific and technological issues, undermining the stability of global production and supply chains, transferring economic and financial risks to the outside world, and periodically harvesting world wealth.
Some analysts point out that "de-dollarization" on a global scale is "de-risking". In this regard, on May 23, on the occasion of his 100th birthday, former US Secretary of State Henry Kissinger told the Wall Street Journal that in order to prevent conflict with China, the United States needs to avoid blind confrontation and seek dialogue instead.
The battle over the debt ceiling is essentially about how to control government spending. But the question is, where does the huge spending of the US government come from? The Wall Street Journal noted that compared with the high-profile "non-defense spending" of the two parties, the growing US "defense spending" was deliberately ignored by the two parties. In the eyes of some scholars, compared with the torn US debt, the "elephant in the room" of military spending is the most deserving attention.
On June 1, Senate Majority Leader Chuck Schumer said the debt ceiling deal would not limit the Senate's ability to pass the so-called Defense Assistance Program.
Senate Democratic leader Schumer: This debt ceiling agreement will not limit Senate appropriations for emergency replenishment funds to safeguard our military capabilities.
A day earlier, the United States announced a new round of military aid worth $300 million to Ukraine, including anti-aircraft missiles, the Haimas rocket artillery system, and more.
Texas Sen. Cornyn: I'm worried about the defense numbers, and I'm worried that Sen. Schumer could manipulate the bill to force us into an appropriations process that would be terrible. We did that last year, and it's an ugly process.
claiming that they do not want the situation in Russia and Ukraine to escalate, but they continue to add fuel to the fire in actual actions; It is clear that the bill has been passed to restrict government spending, but the US defense budget next year will continue to rise by 3.3%, which is really a performance of "saying one thing and doing another" to the extreme.
Democratic Sen. Sanders: Tonight, corporate America is very happy that the richest people feel good and don't have to pay a penny more in taxes. The fossil fuel industry feels good and on a fast track that we don't need. And the military-industrial complex, which has $56 billion over the next two years, is pretty good.
In addition to the successive U.S. administrations, the New York Times also noted that since 2000, politicians on both sides of the aisle have developed the habit of borrowing money to fight wars.
On May 23, U.S. presidential candidate Robert Kennedy Jr. retweeted an article by Jeffrey Sachs, former Special Adviser to the Secretary-General of the United Nations and professor of economics at Columbia University, entitled "The American War and the American Debt Crisis."
In 2000, the U.S. federal government debt was $3.5 trillion, equivalent to 35 percent of gross domestic product (GDP) that year. If the federal government's debt ratio were to remain around 35 percent of GDP, as it did in 2000, that debt figure would be only about $9 trillion today. Now that number is more than $31 trillion, where does the extra come from?
Sachs, professor of economics at Columbia University: Since the beginning of the 21st century, we have actually been engaged in non-stop wars, Afghanistan, Iraq, Syria, Libya, Yemen, and now the Russian-Ukrainian conflict. We spent a lot of money, but none of the presidents told us that these wars were so important that we should pay taxes on them, they just issued debt and borrowed.
According to the Watson Institute for International and Public Affairs at Brown University, from fiscal year 2001 to fiscal year 2022, the United States spent a staggering $8 trillion on waging wars. This figure is almost equivalent to the sum of the IMF's estimates of GDP for Japan and India for the whole year 2023 in its World Economic Outlook in April.
Robert Kennedy Jr., from the famous Kennedy family in the United States. On May 7, recalling the assassination of his uncle, John F. Kennedy, the 35th president of the United States, he pointed to the CIA as the culprit.
Reporter: Who do you think killed your uncle?
Voice source Robert Kennedy Jr.: There is overwhelming evidence that the CIA was involved in his murder, and there is no doubt about that.
"When my uncle was president, he was surrounded by the military-industrial complex and intelligence agencies that constantly tried to drag him into wars in Laos, Vietnam, etc."
In his view, John F. Kennedy's refusal to continue sending U.S. troops offended certain militant interest groups in Washington.
Robert Kennedy Jr.: John F. Kennedy realized that the function of U.S. intelligence agencies had become a conduit for the ongoing supply of war to the military-industrial complex.
In 1968, when the Vietnam War reached its peak, his father, Robert F. Kennedy, ran for president of the United States and proposed a three-point plan to end the war in response to rising anti-war public opinion in the country, including a moratorium on the U.S. bombing of the Democratic Republic of Vietnam. In June of that year, Robert F. Kennedy was also assassinated.
Robert Kennedy Jr.: The military-industrial complex undermines democracy. My father died in opposition to the Vietnam War.
The two cases were full of doubts, but they ended hastily, and the "Kennedy curse" was also put away. After the assassination of John F. Kennedy, his successor, Lyndon Johnson, quickly agreed to the demands of the military and military-industrial enterprises to put more armaments into the Vietnam battlefield, further expanding the scale of the Vietnam War.
Sachs, professor of economics at Columbia University: These are wars full of lies, we are never told the truth, what is the purpose of these wars? As we all know, the war in Iraq was based entirely on false pretexts, and this is not an isolated case, and all conflicts in which the United States intervened were based on lies.
The snowballing rise in military spending reflects the ambition of the United States to control the world through war, and also makes the "big thunder" of US debt tick every once in a while, but the "deaf politicians" in Washington turn a blind eye to the solution of "stop waging war and reduce military spending", and instead hit the board of budget cuts on ordinary people.
Ida: There's a great guy here, this is my mom, she's the best.
But it's actually her daughter Tammy. Ida, 90, suffers from dementia. In Murrieta, California, where they live, hiring a home health aide costs $137 an hour. Tammy, 53, chose to quit his job to take care of his mother at home.
Ida's daughter Tammy: We didn't have that much money, she deserved to be better taken care of.
Under a bipartisan agreement that introduces new requirements for eligibility for the Supplemental Nutrition Assistance Program, childless adults under the age of 54 must meet certain job requirements and show proof of employment to be eligible for the program. The previous age limit was 49, which could put about 750,000 Americans between the ages of 50 and 54 at risk of losing assistance. Anti-poverty groups have criticized such restrictions as saving little money but deepening hunger and poverty in the United States.
According to the website People's World, "This has brought pain and suffering to millions of the most vulnerable Americans."
In addition, the agreement also cancels the student loan waiver program previously introduced by the Biden administration. The program provides for up to $10,000 in student loan waiver for individuals earning less than $125,000 per year and married families earning less than $250,000 a year in 2020 and 2021. If the borrower receives a federal Pell grant, up to $20,000 can be deducted. The student loan relief program, which covers about 43 million people, is said to be no in the bipartisan game, and poor students have become the most direct victims.
Schumann, head of finance at Indiana University: The biggest change after the passage of the debt ceiling bill is that after August 30, people who still have outstanding student loans will need to start paying their student loans again. This is a big change, because since March 2020, they would not have had to repay this loan.
Some benefits can be cut, but some cheese can't, and politicians who tear each other apart. For this reason, the Wall Street Journal believes that even if the so-called debt ceiling agreement is eventually reached, it will have limited impact on the cooling economy and high inflation. If the US debt crisis is not addressed at its root, the ultimate losers will be ordinary people.