US playing with fire: six days to default
The dollar is melting, stocks are plummeting, and President Barack Obama is warning of a deep economic crisis; could the unthinkable, an American default, actually happen?
247 – Yesterday, the dollar, the American currency, closed at its lowest exchange rate against the real (R$ 1,54). This morning, it continued to fall and reached its lowest level against the Swiss franc, a currency considered a store of value. “The conversation today is the same as yesterday: sell the dollar,” Kathleen Brooks, director of research at Forex.com, told Bloomberg.
Also this morning, all European stock exchanges, without exception, are painted red – and everything indicates that this Tuesday will be another tense day in the Brazilian capital markets. The reason: the United States continues to play with fire. Intransigent, Republicans and Democrats cannot reach an agreement on raising the American public debt, currently at US$ 14,6 trillion. If this does not happen, the United States will be in default within six days – just like Mexico and Brazil in the 80s, countries that Americans used to consider banana republics.
The situation is so critical that President Barack Obama had to go on television last night. In a live televised address on Monday night, Obama criticized the "partisan circus" in Washington, blamed "some Republicans" for the impasse over the country's debt ceiling, and warned that the lack of a solution to the problem will lead to higher interest rates and more unemployment.
The president supports a plan that, to contain the US deficit, includes spending cuts and the end of tax breaks for the wealthiest 2% of the population.
Republicans, on the other hand, reject raising taxes and advocate for cuts to social programs championed by Democrats.
Analysts say that a US debt default could trigger a surge in interest rates in the United States and potentially threaten the global economic recovery.
"The only reason for this impasse is that some Republicans insist on a solution of only budget cuts and on the social programs we care about," Obama said, adding that his opponents "are holding the economy hostage," in a process that is "offensive to the citizen."
According to former minister Zelia Cardoso de Mello, the American problem is more political than fiscal. Republicans are putting pressure on Obama on the eve of an election year (Read your article.She's betting that a deal will be reached at the last minute. Will it?