preface
What do you think of a neighbor who borrows money from you every day and has a broken relationship with you? After several years of the Cold War, the standard of living on both sides has declined, you have no flour, he has less rice, and now, the neighbor finally can't hold back and cheekily knocks on your door, hoping to get a help so that the days can pass. In the past, when neighbors pinched each other, they broke your farm tools, broke the fence in front of your house, and tried to throw nails on your door.
It stands to reason that when you come to borrow money, you should first put your attitude right and admit your mistakes, but he just said, "I will scatter fewer nails in the future." "It can only be said that there are concessions, but not much, and it is clear that China is facing this situation.
After Trump took office, the United States' trade policy towards China underwent major adjustments, and it successively imposed high tariffs on Chinese goods, kicking off the trade war between China and the United States. Under the operation of the US government, Sino-US economic and trade relations have continued to deteriorate.
The reasons for the U.S. trade blockade with China include the perception that China has unfair trade, its desire to protect domestic industries through tariffs, and concerns that China's economic rise will affect its global position. This trade war has led to a clear decoupling of the Sino-US economy, with China turning to developing domestic demand, and the United States losing the large Chinese market, and its own economy also being affected.
Despite the US trade blockade against China, the United States' own long-term and severe debt problem has not been alleviated at all, and even worsened.
Analysis believes that the purpose of US Treasury Secretary Yellen's visit to China may be to seek Chinese funds to help resolve the US debt dilemma, compared to Yellen, Raimondo has more chips in Sino-US trade negotiations, she may obtain China's support and improve the US debt situation by strengthening cooperation.
Although the optimization of the blacklist of Chinese companies by US business institutions has been interpreted as a goodwill move, China has welcomed it but still lacks sufficient trust, and China has taken countermeasures, but also hopes to resolve differences through dialogue and rebuild stable trade relations.
be heavily in debt
Recently, the balance of US government and auxiliary debt is once again approaching the legal ceiling and falling back into the risk of default, and US Treasury Secretary Yellen has repeatedly warned that if Congress fails to pass corresponding measures in time, as soon as June, there may be a debt crisis of technical default in the United States, which is bound to bring catastrophic negative shocks to the global economy.
U.S. stocks have melted down 4 times in 9 days, and the last circuit breaker was in 1997, which shows the severity of the situation, making people gasp, not to make the stock god Buffett shout "Long time to live!" ”
The frequent occurrence of US debt ceiling disputes has triggered discussions on the US debt issue itself. Why does it keep accumulating? What is the reason for setting a debt ceiling?
The analysis believes that the US government auxiliary has a long-term fiscal deficit state, spending more than revenue, so it continues to make up for the deficit through debt financing, resulting in growing debt, in recent years, the new crown epidemic and other multiple factors have greatly increased US government auxiliary spending, while the slow growth of tax revenue has further aggravated the expansion of deficit and debt scale, frequently touching the debt ceiling.
The deindustrialization of the United States over the years has made the economy resilient no more than before, and the people have taken to the streets to protest, and even merged with the LGBT movement to form 0 yuan purchases, etc., and the moonshine people in the United States see it more clearly: no matter how the government and auxiliary help, no matter how much dollar bills are issued, in the end, they will still be in the hands of the rich.
The subsidies issued by the government, after eating today, will go to the capitalists tomorrow, and even more, the subsidies are higher than wages, and lying in the neighborhood and taking money for nothing, is it not better than working? This has caused a shortage of personnel, aggravated labor costs in disguise, starved small businesses, aggravated inflation, and dug deeper and deeper.
The United States set up the debt ceiling originated in 1917, aimed at limiting the scale of government borrowing, although the ceiling creates certain constraints, but also reflects the United States' credit commitment to creditors, in the history of the United States Congress has raised the debt ceiling many times, showing the flexibility of this mechanism, but in recent years, the ceiling issue has become a bargaining chip in the game between the two parties, and it is more difficult to increase.
At present, the two parties control the two houses separately in Congress, disagree on the upper limit, and increase the risk of default, and in 2011 the United States was in a similar dilemma, and finally narrowly avoided default in negotiations, but the ensuing economic volatility and fiscal austerity also dealt a heavy blow.
The current situation is similar to that of the time, and if the crisis is repeated, it will also adversely affect the US and global economies, and the composition of the huge debt is also diverse: deficit financing forms debt, and the US government has a chronic fiscal deficit.
Taking fiscal year 2019 as an example, the fiscal revenue of the US government auxiliary in fiscal 2019 was about 3.46 trillion US dollars, while the fiscal expenditure of that year reached about 4.45 trillion US dollars, and there was a fiscal deficit of about 900 billion US dollars.
As of 2012, the United States spent $810 billion on military spending in the Iraq War, which was mainly financed by the issuance of national bonds.
Tax relief policy debt, in 2017, Trump implemented a large-scale tax cut, which cut taxes by $150 billion that year, which directly led to a decrease in fiscal revenue and had to increase the amount of debt issued.
During the 2009 financial crisis, Obama launched a $780 billion stimulus package, which was also financed by borrowing.
Hidden debt, such as Medicare spending in the United States, reached $800 billion in 2019, and this part of the transfer payments will also be converted into government debt.
These debts can only make the United States use the dollar to continuously suck the blood of the world, and the current US tall buildings are shaking slightly, hurting the foundation——— that is, the credibility of the dollar.
summary
At present, the United States is facing a severe debt crisis, which stems from its long-term fiscal deficit and dependence on debt financing, the epidemic period of government auxiliary spending has increased significantly, accelerating the expansion of debt scale, frequently touching the statutory debt ceiling, this time there is a default risk, the investment market fluctuates sharply, the reason is that the root cause of the US debt problem lies in its long-term imbalance in political auxiliary fiscal revenue, various military and civilian livelihood expenditures need to be filled by a large amount of borrowing, which includes both direct national debt, but also hidden debts such as medical care, at the same time, Deindustrialization in the United States has also weakened economic resilience,
Although the United States set the debt ceiling to restrict the scale of borrowing, but it also often becomes a bargaining chip in the game between the two parties, if it falls into the same predicament as in 2011 again, it will not only lead to global economic turmoil, but also make the US economy suffer a long-term blow.