In this commentary, AIMS Board Chair John Risley discusses the possible outcomes and consequences of the US government’s upcoming August 2nd decision on the debt ceiling. The U.S. has self-imposed debt ceilings which, once reached, require the administration to seek congressional approval for them to be raised. The theory behind such limits is that it imposes discipline on the administration and requires the president to acknowledge the role of Congress in pre-approving deficit spending in excess of the current limit. That limit now stands at $14.294 trillion.
Risley explains how partisanship has divided the debate into disheartening rhetoric, and emphasizes the importance of a resolution that brings about a long-term plan. The US is still the world’s largest economy, and the US dollar is the only true reserve currency. The world needs a reserve currency that commands the respect and confidence in the world.
In Get this right…please, Risley argues that if a good long-term plan requiring compromise and the dismantling of special interest group privileges is not found, then the world economy will pay a big price – making August 2nd a very important date.
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