This week, President Obama urged Congress to compromise on the so-called debt ceiling, the legal ceiling for federal debt, and agree to a new budget that balances America’s books. Policy experts and politicians have prophesied that any prolonged bipartisan stalemate would plunge the United States into a new economic crisis. It appears that the Congressional “Gang of Six”, made up of top lawmakers from both sides of the island, has finally agreed to go ahead with talks to cut nearly $ 3.7 trillion in federal spending over the next 10 years. Although it is unclear from which programs and jurisdictions this money will come, it is clear that reaching a final version of any subsequent compromises and bills, in the bipartisan House and Senate, will be long and harrowing.
Credit card bills become a headache for everyone
Much of the United States will be relieved that the US government is not shutting down, as it threatened many times earlier this spring. Some may recall the thousands of government employees who were suspended because lawmakers could not reach an agreement on the federal budget.
Evidently, even the most powerful people in the country are struggling to dominate spending and control their credit.
These temporary lapses in government underscore the availability or lack of new credit and new credit alternatives. US lawmakers are effectively engaged in what many credit card customers would recognize as credit card negotiation.
Like all credit card consumers with revolving debt, many legislators are experiencing for the first time the anxiety and pressure that comes when creditors call and you can’t pay; in this case, non-payment could mean years of political backlash from angry voters. What’s worse, a federal-sized “credit card deal” going awry could undermine the fragile but recovering international economy.
Unlike the eurozone
Over the past year, the United States, despite opinions and forecasts to the contrary, has weathered rough economic forecasts with brazen conviction. Much of the eurozone, in countries such as Italy, Spain and Greece, has suffered a crippling series of severe economic shocks amounting to a nationwide bankruptcy. Not infrequently financial earthquakes have hit the eurozone and pushed it to the brink. The confidence of international creditors and banks has been shaken by high unemployment in key euro zone countries and the reduction of hundreds of billions of dollars of European consumer debt to the category of “junk” .
Of course, no one can argue that the United States and the euro zone have not experienced similar difficult times. Historically, however, there has always been a big difference in the perspective of American consumers and the confidence of Europeans and Americans often prevails over difficulties. That still seems to resonate in a bipartisan Congress this week: Americans are moving forward.
