On Saturday evening, just days before a potential default, a tentative agreement has been reached between President Joe Biden and House Speaker Kevin McCarthy (R-CA) on the debt ceiling.
“It has historic reductions in spending, consequential reforms that will lift people out of poverty into the workforce, [and] rein in government overreach. There are no new taxes, no new government programs…”
Read More: Daily Wire
The United States faces a “significant risk” of defaulting on payment obligations within the first two weeks of June without a debt ceiling increase, the Congressional Budget Office said Friday, adding that payment operations will remain uncertain throughout May.
Read More: Newsmax
Mario Soares, who led Portugal to democracy in the 1970s after the Salazar dictatorship, has called on the government to default on its debts. The economic pressure on Portugal has been mounting in recent weeks, and the nation is losing patience with the EU imposed austerity. The Portuguese are looking at the death spiral in Greece, caused by their various rounds of bailouts and austerity.
Soares told Portuguese television channel Antena 1, “Portugal will never be able to pay its debts, however much it impoverishes itself. If you can’t pay, the only solution is not to pay. When Argentina was in crisis it didn’t pay. Did anything happen? No, nothing happened”.
Last week Portugal’s top court ruled that the government’s decision to slash pension payments and public sector wages was illegal. The ruling means the government is struggling to find the budget cuts required from elsewhere.
Portugal received an EU/IMF bailout in 2011, and as the crisis deepens again, many think it highly likely they will need another bailout very soon. If Portugal were to default, it would almost certainty mean their expulsion from the eurozone, and may lead other nations to follow their example.
As China chides the West for our mountains of debt, they have an inconvenient truth of their own. Decades ago China began to sell sovereign bonds to the West. However, for the last 60 years they have refused to pay bondholders back, not even the interest!
Britain managed to broker a deal with China as part of their agreement over Hong Kong, which ensured China pay back their debts to the UK, however the rest has remained unpaid. Consequently China owes $750 billion to America, and several trillion dollars globally! This ought to be termed as a “selective default”, however the ratings agency choses to look at it differently.
The consequences of this fudge of the rules means China continues to pay nothing on these debts, but demands the rest of the world to pay theirs.
America pays her debts. She asks China to do likewise.