Recently, the United States has faced an unprecedented shutdown crisis, and the outbreak of the debt problem has become the fuse of this crisis. According to a report released by the US Treasury Department, the US national debt has exceeded $34 trillion, which is undoubtedly a staggering figure. For a long time, the debt of the United States has continued to rise, which undoubtedly poses a huge threat to the financial stability of the United States and the economic security of the country.
In the midst of this shutdown crisis, the U.S. Congress has been locked in heated debate. Some analysts believe that it is difficult for the US Senate and House of Representatives to reach a consensus on the debt issue. If they can't solve this problem, then the United States will have to shut down. The consequences of the shutdown would lead to the shutdown of institutions in Washington, with a severe economic shock to the entire country. Although in mid-November 2023, the U.S. House of Representatives passed a temporary bill to avoid a shutdown, this is only a temporary stopgap measure and it is difficult to solve the underlying problem. If the future political stalemate continues, the United States** will inevitably face an even more serious shutdown crisis.
Such a large amount of U.S. national debt is not only frustrating, but also poses a huge threat to the U.S. economy and ***. This is also one of the most direct reasons why the United States is facing a shutdown crisis.
First of all, the huge debt level of the United States** directly leads to the rise of interest rates, which in turn leads to economic instability and increased inflation. This will not only have a serious impact on the internal economic order of the United States, but will also affect the position of the United States in the global economic system.
Second, the current problems facing the United States can only be solved by reducing spending or raising taxes further. Whichever option is chosen, however, the United States will struggle to cover its huge fiscal deficit, and the problem will have significant implications for the United States and could trigger a severe economic crisis.
In addition, considering that the United States is the world's largest economy, its economic problems will inevitably affect other countries. In particular, as one of the main holders of U.S. debt, China has been increasing its reserves to reduce its dependence on U.S. economic problems. However, the expansion of U.S. economic problems could have a knock-on effect on China and other developing countries, not only affecting their economic recovery, but also potentially creating opportunities for the U.S. to exert renewed pressure on other countries.
As U.S. Treasuries hit new highs, China has been increasing its U.S. debt and reserves. Although China still holds $769.6 billion in U.S. bonds, recent data shows that China continues to hold U.S. bonds. To a certain extent, this move could help China mitigate the impact of the U.S. economic problems on its own economy.
China's U.S. debt and reserve increase is a strategy to actively adjust the asset structure. As U.S. economic problems continue to intensify, China realizes that relying too much on U.S. Treasuries could pose serious risks. As a result, China is looking to diversify its investments to reduce its dependence on dollar assets. It is also a manifestation of China's efforts to protect its own interests and economic stability while dealing with the U.S. debt problem.
However, as the world's largest economy, the impact of the economic difficulties of the United States on China and other countries cannot be ignored. Both China and other developing countries need to be vigilant and deal with the various tricks that the United States may use on the issue of funding to avoid falling into the economic traps set by American politicians.
With regard to the shutdown of the United States** and the $34 trillion national debt, we need to recognize the far-reaching implications for the United States and the global economy. The debt problem of the United States is unsustainable and will lead to a series of serious problems such as economic instability, increased inflation, and even ***. Although China and other countries have reduced their dependence on the U.S. economy through measures such as U.S. debt, the entire global economic system still faces enormous challenges.
For China, it must remain vigilant, actively adjust its asset structure to reduce its sensitivity to US economic fluctuations, and strengthen cooperation with other countries to jointly address global economic challenges. For other countries, they must pay close attention to the economic situation of the United States and take appropriate measures to ensure the stability and development of their own economies.
Finally, we need to see that this shutdown crisis on the US debt problem will not only affect the United States itself, but also have a significant impact on other countries and the global economy. Therefore, all countries should strengthen cooperation to jointly address challenges and promote the stability and development of the world economy. Only through genuine cooperation and hard work can we get out of debt distress and bring sustained and stable growth to the global economy.