The US debt ceiling bill is difficult to dispel the world's "unease" towards the United States - Interview with Hideyoshi Tani, Chief Economist of Japan's Infinite Contract Society, on the ceiling | debt | the United States
Tokyo, June 13th (Xinhua) - Interview: The US debt ceiling bill is difficult to dispel the world's "unease" towards the US - Interview with Hideyoshi Tian, Chief Economist of Japan's Infinite Contracts Agency
Xinhua News Agency reporter Zhong Ya and Li Guangzheng
Earlier this month, US President Biden signed a bill on the federal government's debt ceiling and budget, temporarily easing the current US debt crisis. In this regard, Tian Daixiu Min, chief economist of Japan Unlimited Contracts Association, said in an exclusive interview with Xinhua News Agency recently that the debt ceiling bill could hardly eliminate the world's "unease" about the US debt problem.
Tian Dai said, "The bill comes at the cost of spending cuts by the Democratic Party, and Republicans have tasted the sweetness of using the debt ceiling as a political tool. In the future, this operation will continue. When the ruling party cannot meet the requirements for fiscal spending cuts, the US government will default on its debt."
Tian Dai believes that the root cause of the US debt problem lies in the hegemony of the US dollar. As long as the US borrows US dollars from foreign countries, it can directly repay its external debt through printing a large amount of US dollars, diluting the burden of external debt, and "forming a terrible system where the US borrows at extremely low costs and becomes addicted to borrowing.".
Tian Dai stated that the US debt crisis has exposed the essence of US dollar hegemony, and the US is irresponsible to creditor countries by using the debt ceiling issue as a tool for party struggle.
He believes that using the debt ceiling as a political tool would have a negative impact on the economy. In the short term, it causes severe fluctuations in exchange rates and stock prices. In the long run, it will shake the world's confidence in US bonds, and once a large number of holders choose to sell, US bond prices will inevitably plummet.
"The United States has always made a huge mistake, that is, it is not worried about selling US debt when it has the hegemony of the US dollar. The US debt ceiling crisis has once again exposed the high instability of US debt to the world, giving the United States a lesson," said Tian Dai.
"The hegemonic model of the United States' excessive reliance on ultra-high debt is not a question of whether it can be sustained, but a question of when it cannot be sustained," he said.
According to data from the US Treasury Department, the size of the US federal debt has skyrocketed from $3.2 trillion in 1990 to over $31.4 trillion today, accounting for over 120% of the US gross domestic product.
Tian Dai stated that in the current high debt situation of the US government, the Biden administration is still spending money on trade protectionism and decoupling, providing huge subsidies to companies manufacturing semiconductors and electric vehicles in the US, further increasing the financial burden.
He believes that the United States should handle the US debt issue with caution and responsibility, ensuring that the interests of creditor countries are not harmed.