Senin, 04 Oktober 2021

Joe Biden’s dire warning: a ‘meteor’ is headed to tank the US economy - Sydney Morning Herald

Washington: President Joe Biden has warned that a “meteor” will crash into the US economy if Republicans continue to block efforts to raise the US debt ceiling, blasting his political opponents for deploying “hypocritical, dangerous and disgraceful” tactics.

The US federal government is set to run out of money on October 18, a development financial analysts warn would wipe out millions of jobs, crash the stock market and devastate American economic growth.

The government would also be unable to issue vital federal payments, such as Social Security cheques to senior citizens.

Republican Senate leader Mitch McConnell has argued that Democrats should act alone to lift the debt ceiling, but the Senate’s complicated filibuster rules mean they may not be able to do so before the federal government defaults on its debts – a deadline known as the “X date”.

In an unusually fiery speech at the White House, Biden said that Republicans were playing “Russian roulette with the US economy” by refusing to help Democrats raise the debt ceiling.

“I think, quite frankly, it’s hypocritical, dangerous, and disgraceful,” he said on Tuesday (AEDT). “Their obstruction and irresponsibility knows absolutely no bounds, especially as we’re clawing our way out of this pandemic.”

Biden continued: “A meteor is headed to crash into our economy. Democrats are willing to do all the work stopping it. Republicans just have to let us do our job. Just get out of the way. If you don’t want to help save the country, get out of the way so you don’t destroy it.”

Democratic Senate Leader Chuck Schumer said that Congress needed to send a bill on the debt ceiling to Biden’s desk by the end of the week to avoid unleashing financial calamity.

“We do not have the luxury of waiting until October 18, as it is our responsibility to reassure the world that the United States meets our obligations in a timely fashion and that the full faith and credit of the United States should never be in question,” Schumer wrote in a letter to his colleagues.

“The consequences of even approaching the X date could be disastrous for our economy and devastating to American families.”

In a letter to Biden, McConnell said there was a real risk the US government could “sleepwalk toward an avoidable catastrophe”.

“Republicans’ position is simple,” McConnell wrote. “We have no list of demands. For two and a half months, we have simply warned that since your party wishes to govern alone, it must handle the debt limit alone as well.”

Republican Senate Leader Mitch McConnell said it was up to Democrats to act alone to stop the US government defaulting on its debts.

Republican Senate Leader Mitch McConnell said it was up to Democrats to act alone to stop the US government defaulting on its debts. Credit:AP

In an analysis to investors last month, Moody’s Analytics chief economist Mark Zandi warned of “cataclysmic” consequences if the US debt limit is breached, comparing the resulting downturn to the financial crisis of 2008-2009.

“That means real GDP would decline almost 4 per cent peak to trough, nearly 6 million jobs would be lost, and the unemployment rate would surge back to close to 9 per cent,” Zandi warned.

“Stock prices would be cut almost in one-third at the worst of the selloff, wiping out $US15 trillion in household wealth.”

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2021-10-04 17:03:33Z

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