Fears of a double-dip recession stares in the face of US citizens with Republicans and Democrats landing on a collision course for the last few weeks. President Barack Obama’s efforts to raise the debt ceiling from the present $14.3 trillion are being scuttled by the Republicans who constitute a majority in Senate arguing that instead of raising the debt ceiling spending cuts are the best solution. Democrats counters the Republicans by advocating that cuts in spending will not only affect the social sector but also affect the payment of salaries of the federal workers and social sector and the party points towards various sectors which are going to be affected by spending cuts. An adamant G.O.P (Grand Old Party) still sticks to its guns thereby plunging the economy to a default crisis.
Tuesday is set to be the deadline before which a solution should have to be arrived at and US Congress though with the co-operation of Republicans passed the increase in debt ceiling the Senate where the Republicans constitute the majority scuttled it pointing towards differences in the Republican camp.
In the event of debt ceiling crisis not resolved AAA rating will be threatened and a double-dip recession is the consequence.
Raising taxes of the wealthy is anathema to the Republicans since a long time, it must be recalled.
It is reported that stock prices are plunging in the Wall Street and investors are panicky because of the piquant situation that America is in on account of the Democratic-Republican collision path over the raising of the debt ceiling.
Federal Reserve Governor Ben Bernanke has already hinted the possibility of the adverse consequences lest the problem is resolved soon.
Let’s await how the events are going to turn out whether a repproachment is possible in the end after marathon talks between the ruling Democratic and Republicans.
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