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US debt crisis

Analysis and Comment (21)

The deadline for the US budget sequester —which will see across-the-board spending cuts of $US 85 billion implemented over the fiscal year — is rapidly approaching. The deadline for the US budget sequester —which will see across-the-board spending cuts of $US 85 billion implemented over the fiscal year — is rapidly approaching. AAP

No silver lining to US budget sequester

The first thing you should know about the sequester is that nearly everyone agrees that it’s a bad idea. In fact, that was the point. In the summer of 2011, with congressional Republicans refusing to raise…
President Obama has proposed $US1.5 trillion worth of tax increases for the rich. President Obama has proposed $US1.5 trillion worth of tax increases for the rich. AAP

Evoking Keynes and Truman, Obama’s plan is good policy and smart politics

Sometimes good policy and good politics are the same thing. By tying together lessons learned from economist John Maynard Keynes and former president Harry Truman, Barack Obama is taking steps that may…
Obama’s mishandling of the politics of stimulus and deficit may be costing him voter support. Obama’s mishandling of the politics of stimulus and deficit may be costing him voter support.

As Obama’s jobs plan fails to find support, are voters losing the faith?

President Barack Obama’s $US447 billion jobs plan appears to be struggling. Republican resistance to some aspects of the rescue deal announced last week - particularly around government spending - was…
In announcing his $US447 billion stimulus, Obama has his eyes firmly on the US election in 2012. In announcing his $US447 billion stimulus, Obama has his eyes firmly on the US election in 2012.

Obama throws down electoral gauntlet with economic plan

Barack Obama has laid out a US$447 billion (A$421 billion) plan to cut payroll taxes and boost government spending to create jobs, in a bid to “jolt” the stalled US economy back to life. Obama told a joint…
While the US is finding its footing, China is looking to expand its global economic power by pushing for the renminbi importance in international transactions. While the US is finding its footing, China is looking to expand its global economic power by pushing for the renminbi importance in international transactions. Fotopedia/Philip Roeland

How the West’s money problems could hasten global power shift

The downgrading of US debt by Standard & Poor’s may sound the starting gun for an enduring rebalancing of global economic power. For decades, investors worldwide sought the safety of US government…
China may appear strong now compared to the troubled US, but still lags behind in technology and per-capita wealth. China may appear strong now compared to the troubled US, but still lags behind in technology and per-capita wealth. Flickr/futureatlas.com

Global economic shakeout: China may win this round, but don’t write the US off yet

Europe is on the decline. The US has its own problems. Meanwhile, China and India appear strong. But is it too soon pick the next global superpower? In this Q+A, Professor Geoffrey Garrett, CEO of the…
Stock markets around the world plummeted after news of the US credit rating downgrade (EPA/FRANK RUMPENHORST) Stock markets around the world plummeted after news of the US credit rating downgrade (EPA/FRANK RUMPENHORST)

Debt dive: why is the US at the mercy of anonymous credit agencies?

Without the firing of a single shot in anger, a country has been, at least in a sense, brought to its economic knees. The capitalist system, with variations and aberrations, is now reacting. Shares are…
Barack Obama led a cheery cabinet after avoiding a US default - but was the deal too late? Barack Obama led a cheery cabinet after avoiding a US default - but was the deal too late?

Hold on: we’re in a for a hell of a ride

“Most importantly it will allow us to avoid default and end the crisis that Washington imposed on the rest of America. And it will allow us to lift the cloud of doubt and uncertainty.” President Barack…
Global markets have fallen dramatically over fear of a US double dip recession and global downturn. Global markets have fallen dramatically over fear of a US double dip recession and global downturn. AAP

Global market carnage: experts respond

The Australian share market has followed Wall street overnight and other global markets, with as much as $60 billion wiped in value throughout the day. The Reserve Bank of Australia has cut the forecast…
Has his compromise with Republicans over the debt ceiling ended Obama’s electoral hopes? Has his compromise with Republicans over the debt ceiling ended Obama’s electoral hopes? AAP

Is Obama doomed? The debt crisis and 2012

Despite the apparent disgust of many Americans and the contempt held by many outside observers, US politics is supposed to look this way – at least sometimes. The widely diagnosed dysfunction of the recent…
The US debt deal: hold onto your hats, it’s going to be a hell of a ride. The US debt deal: hold onto your hats, it’s going to be a hell of a ride. AAP

Of debt and US dollars: when bad money chases out good

“A catastrophe on multiple levels.” That’s how New York Times columnist Paul Krugman characterised the US debt deal brokered this week between Democrats and Republicans. President Obama on Tuesday signed…
Like other “dollarised” developing economies, Timor Leste will feel the pain of a US dollar decline. Like other “dollarised” developing economies, Timor Leste will feel the pain of a US dollar decline. AAP

Despite the debt deal, the US dollar is on the nose in developing countries

Although the US debt ceiling crisis has been resolved for now, the saga has obvious implications for developing countries. Yet, as is often the case, political conflict is obscuring the persistent and…
A Tea Party supporter takes part in a rally in Washington’s Capitol Hill. A Tea Party supporter takes part in a rally in Washington’s Capitol Hill. AAP

The Tea Party claims victory - but will the last laugh be Obama’s?

To outsiders looking in, the recent crisis in governance in the United States surrounding the debt ceiling might appear to be a farce, if the stakes were not actually so serious. Until Tuesday (EST), the…
Standard & Poor’s could still downgrade the US credit rating, despite the debt ceiling deal. Standard & Poor’s could still downgrade the US credit rating, despite the debt ceiling deal. AAP

Explainer: the role of credit ratings agencies

Washington lawmakers in the US House of Representatives have passed an agreement hammered out between Republican and Democrat leaders designed to avert a US debt default. The move is a further step towards…
Barack Obama announces an agreement has been reached to resolve the US debt crisis. Barack Obama announces an agreement has been reached to resolve the US debt crisis. AAP

US debt deal: experts respond

US President Barack Obama says Democrat and Republican leaders have reached an agreement on reducing US debt, before the August 2 debt ceiling deadline. Failure to reach a deal may have led to a historic…
President Barack Obama: will his resolve stand as the debt clock ticks down? President Barack Obama: will his resolve stand as the debt clock ticks down?

Does Obama have the courage to stand his ground?

As the political stand-off around the US debt crisis looks set to continue into the weekend, US President Barack Obama is being tested whether he has the courage to stand his ground. Last week the President…
Republican resolve to hurt President Obama - even at the risk of default - should not be underestimated. Republican resolve to hurt President Obama - even at the risk of default - should not be underestimated. AAP

US debt crisis: don’t be surprised if Republicans get a bit crazy

I rang some people at big banks who do liquidity and balance-sheet management to see how they are preparing for the August 2 deadline for US debt funding. They seemed remarkably sanguine. The feeling is…
Minnesota’s three-week shutdown saw basic government services stripped back. Minnesota’s three-week shutdown saw basic government services stripped back. Flickr/mngop

Minnesota shutdown broadens the blue-red chasm in US politics

Minnesotans have breathed a sigh of relief after the state’s Republican-led legislature signed off on a budget deal negotiated with Democratic Governor Mark Dayton, ending a three-week state government…
Intense US debt ceiling negotiations in a political war of nerve; but no resolution yet. Intense US debt ceiling negotiations in a political war of nerve; but no resolution yet. AAP

No hard ceilings? The dance around US debt intensifies

International ratings agencies Moody’s and Standard & Poors have both indicated they would consider downgrading the US’s debt rating as negotiations aimed at raising the country’s statutory US$12.3…
US House Speaker John Boehner wants government programs cut: but is austerity politics the answer? US House Speaker John Boehner wants government programs cut: but is austerity politics the answer? AAP

US austerity politics playing on default fears mask a looming problem

For some time, it appeared that the severity of the global financial crisis had created a compelling “learning moment” that promised to return the world to a more civilised form of capitalism. Insufficient…