The world is watching the US debt ceiling debate

Briefly: US spy chief Avril Haines has warned that China and Russia would “love” to see the US descend into chaos if Congress can’t agree to extend the country’s borrowing limit.

The US is one of only two industrialised nations with a hard debt ceiling. In the other nation (Denmark), the government’s borrowing limit attracts little attention and is seen as a formality or technicality.

But in the US, the debt ceiling periodically triggers a broader debate about spending and the role of government. That’s now happening again, and the resulting brinkmanship risks the US defaulting on its debts. That would mean:

Intrigue’s take: A needless US debt default would be the biggest self-inflicted PR mess since United Airlines beat up “re-accommodated” a passenger. And it’d play neatly into a narrative of Western decline that’s been getting plenty of airtime with propagandists in Moscow, Beijing and beyond.

Also worth noting:

  • The US has raised its debt ceiling 78 times since 1960. Denmark has raised its own ceiling once, when lawmakers doubled it in 2010.
  • The ‘X-date’ (the point at which the US might default on its debts without increasing the debt ceiling) could be as early as next month.
Latest Author Articles
The geopolitics of UEFA football

With Europe’s UEFA men’s football (sorry, ‘soccer’) championship final happening this Sunday, what better time to have a look at the geopolitics of it all?

11 July, 2024
Why banks are closely following record-breaking Hurricane Beryl

With winds reaching 165 mph, Hurricane Beryl made landfall in Grenada and St Vincent on Monday and was upgraded to a Category 5 storm yesterday. 5 is the highest rating on the Saffir-Simpson Hurricane Wind Scale, which is used to estimate potential property damage.

3 July, 2024
China’s Central Bank dips into bond market amid economic slump

The People’s Bank of China (PBOC) announced on Monday that it was going to dip its toe into the open market and “borrow” Chinese government bonds from primary dealers.

2 July, 2024
What Julian Assange has left behind

WikiLeaks founder Julian Assange is now a free man in his native Australia, after a deal with the US saw him plead guilty to one charge of seeking to obtain and disclose classified material.

27 June, 2024