World Weekly | Tearing up the "US Bond" Agreement | Debt | Weekly

This week, the United States took a step back from the cliff of debt default and has not yet fallen off the cliff. But in Fox News's view, the United States has not fundamentally solved the problem of debt loss, it has just jumped from one pit to another. During this process, the two parties engaged in extreme tugs of war, and the US debt continued to tear and expand like a leaking ball, increasing the risk of an economic downturn in the United States.

On June 3rd, at the White House, President Biden signed into law the previously passed Financial Responsibility Act in Congress. And the two parties in the United States have already entered a "grab credit" mode ahead of schedule.

Senate Democratic Leader Schumer: We received more votes in favor because the bill pushed back the worst part of the Republican agenda.

Senate Republican Leader McConnell: Speaker McCarthy and House Republicans deserve our gratitude.

On the evening of June 1st, this bill narrowly passed the Senate.

California Senator Padilla: In this vote, there were 63 votes in favor and 36 votes against, reaching the threshold of 60 votes, and the bill was passed.

The Associated Press noted that almost no one is satisfied with this convoluted agreement, but most lawmakers believe that the two parties are unable to reach a better alternative before X day. This is the 103rd time since the end of World War II that the US Congress has adjusted its debt ceiling.

Chairman Bauer of the investment company: Today's market reflects a sigh of relief, we will not have a debt crisis.

Martin Wolf, Chief Economic Commentator of the Financial Times, pointed out that the recurring absurd farce created by both parties in the United States not only seriously undermines the credibility of the United States, but also increases the likelihood of a financial system collapse.

Ironically, in the House vote on the evening of May 31st, the number of Democrats who voted in favor of this rarely exceeded that of Republicans, which is in stark contrast to the collective opposition of Democrats to Republican proposals in the past. Some conservative Republicans simply believe that they have been "betrayed" by McCarthy.

Republican Congressman Bishop: No, zero. What is confidence based on? You cannot give up the tool that unites the Republican Party, you cannot do so.

Republican Congressman Bishop: Yes, he's lying.

The "Great Rip" of the Republican Party actually had signs for a long time. According to the agenda, the bill must first be approved by the House Rules Committee before being voted on by the entire house. This committee is composed of 9 Republicans and 4 Democrats, but there has been infighting among the majority of Republicans. Three hardline conservatives from the Republican Party were appointed to the Rules Committee by McCarthy in January of this year. At that time, McCarthy's vote for the Speaker of the House of Representatives was in a difficult situation, and it was only after up to 15 rounds of voting that he narrowly passed. The appointment of these three hardliners to the rules committee with real power is seen as a compromise by McCarthy to gain support within the party. Two out of three people are now facing another challenge.

Republican Congressman Ralph Norman: I can't accept it, I don't want it to pass. A bad agreement is better than no agreement.

Republican Representative Chip Roy: No Republican should vote for this agreement, it's a terrible agreement.

The media noted that this agreement, which has been much "complained about", was initially reached by Biden and McCarthy on May 27 after weeks of intense negotiations. Its core content includes agreeing to limit the federal government's spending in fiscal years 2024 and 2025 in exchange for suspending the debt ceiling until the beginning of 2025.

Associated Press Congressional Reporter Groves: This bill is a compromise between the Democratic President and the Republican Speaker of the House of Representatives.

In Fox News's view, the agreement reached between Biden and McCarthy is a typical Washington behind the scenes agreement, and the current financial situation of the United States is very poor, and this debt agreement is completely unable to cope.

Since 1917, the debt ceiling of the United States has been raised more than 100 times. The debt ceiling negotiations between the two parties have always been a "political performance", but now they are more like a "political ball". The two parties are not only "tearing each other", but also "internal friction".

The New York Times believes that this exposes the "ugly side" of American politics.

Florida Governor De Santis: Let me tell you, our country was facing bankruptcy before the debt ceiling agreement was reached, and we will still face bankruptcy after the debt ceiling agreement is reached.

The media has noticed that Florida Governor De Santis repeatedly emphasized the "American bankruptcy theory", which is similar to Trump's "Great Depression theory" proposed more than two months ago. At that time, Trump described Biden as a heavily criticized "modern version of Herbert Hoover.".

On June 1st, 80 year old US President Biden accidentally fell at the graduation ceremony of the Air Force Academy, adding to the electoral hurdles and reminding people of the heavy burden of the US economy.

On May 24th, De Santis officially announced his candidacy for the 2024 presidential election.

Florida Governor De Santis: You just need to make a choice, don't let our descendants clean up the mess.

The New York Post believes that De Santis's "mess theory" has dealt a blow to both Biden and Trump, and can be described as killing two birds with one stone. The media noticed that when discussing the debt issue, De Santis emphasized that "at least since the late Trump administration, the US government has been spending too much money.". This is also seen as simultaneously throwing blame at two former presidents. When discussing how to solve these problems, De Santis said that if he is elected president, it is expected to be resolved in his second term.

On June 1st, Trump bluntly stated that Americans don't need to wait for another eight years, he can solve the problem in six months. The media has noticed that it only took five years for the transition from "feeling the same father and son" to "turning the tables and competing".

When running for governor of Florida in 2018, De Santis was labeled as a Trump apprentice. Nowadays, the former "master disciple" has become a competitor. According to the American news website "Vox", in order for De Santis to win, what he needs is not to deny Trump, but to shape himself into an upgraded version of "Trump 2.0".

On the night when De Santis announced his candidacy, Trump also released a campaign advertisement. The first three shots were all of De Santis, and the fourth shot was of De Santis and Biden, seemingly hinting at the strongest opponents within and outside the party.

As of now, nearly 10 people within the Republican Party have announced their candidacy. US media reports that former Vice President Pence will also officially join the war group on June 7th. Various intricate and complicated conflicts and grievances make it difficult to avoid a fierce battle in the Republican primary election.

And another candidate, Republican Senator Tim Scott, loudly called for Republican candidates to show mercy when attacking each other, because the black material they expose will become a political weapon for Democratic presidential candidates in the future.

In the view of the Economic Times of India, even if the two parties reach an agreement, it will only bring "temporary excitement", and the market will soon realize that this is actually "bad news", while the Federal Reserve has more reason to be confident in further interest rate hikes.

Reuters pointed out that after the debt ceiling deadlock is suspended, the US Treasury Department is expected to issue a large number of bonds in a short period of time, quickly filling the void in the treasury, which will suck up up to a few hundred billion dollars of funds in the market.

Nowadays, the cash flow of the US Treasury Department has been decreasing, with only $37.36 billion remaining as of May 30th. According to the Bloomberg Billionaires Index, there are 31 billionaires worldwide whose wealth exceeds that of Uncle Sam, including legendary investor Buffett and Silicon Valley Iron Man Musk.

Construction company manager McLaskey: I am very frustrated about this. Politicians, do your job well and don't let others take risks.

Baltimore, the largest city in Maryland, receives 60% of McLaskey's construction company's revenue from government contracts.

Construction company manager McLaskey: In the next 30 to 60 days, we will complete projects worth millions of dollars. When will we receive compensation? I still have a lot of work to do in the second half of the year, provided that there is no economic disaster.

Chris, an ordinary worker, is more anxious.

Construction company worker Chris: When you have four people to feed, who knows what will happen, but you need a roof on your head and food in your belly.

The national economic survey report released by the Federal Reserve on May 31st showed signs of cooling in the US economy in recent weeks. The US consumer confidence index has also fallen to a 6-month low. Even the US government, which once clamored for decoupling and disconnection, is no longer calm.

According to Fox News, the Biden administration is considering arranging a series of senior officials to visit China in the near future, including Treasury Secretary Yellen and Commerce Secretary Raymond, the former involving US bonds and the latter involving trade and economic relations.

And American business people have already taken a step ahead. On May 30th, when Silicon Valley's "Iron Man" Musk arrived in Beijing, Tesla's stock price rose by 5% at one point. Musk expressed opposition to "decoupling and chain breaking" and is willing to continue expanding business in China and sharing development opportunities in China.

As the countdown to US bond defaults approaches and the risk of an economic recession increases, Musk's visit carries symbolic significance.

Coincidentally, the Wall Street Journal has noticed that in recent months, American entrepreneurs including Apple CEO Tim Cook and Starbucks founder Howard Schultz have been visiting China. The "coming to China fever" is a vote of confidence cast on the Chinese economy, which fully demonstrates that decoupling from China is not popular.

On May 20th, the US led G7 summit launched a new term.

European Commission President von der Leyen: I believe we must de risk, that is, focus on specific risks.

UK Prime Minister Sunak: All of this is for risk-taking, not decoupling.

In the eyes of The New York Times, the term "decoupling" appears too strong, while "de risk-taking" only sounds milder. But ultimately, it is still "old wine in new bottles", which is the hegemonic power of the United States to coerce other countries with forceful rhetoric and "deception". In fact, it is the United States itself that abuses the hegemony of the US dollar, forcefully promotes unilateralism, and disrupts the world order, not only leading to its own debt crisis, but also forcing the financial security of other countries to face the risk of being implicated.

Chinese Foreign Ministry spokesperson Mao Ning: The real risks facing the world are engaging in factional confrontation and a new Cold War, recklessly interfering in the internal affairs of other countries, creating regional turmoil and chaos, politicizing economic, trade and technological issues, disrupting global supply chain stability, shifting economic and financial risks to the outside world, and cyclically harvesting world wealth.

Some analysts point out that de dollarization on a global scale is de risk-taking. On May 23rd, on the occasion of his 100th birthday, former US Secretary of State Henry Kissinger told The Wall Street Journal that in order to prevent conflict with China, the US needs to avoid blind confrontation and instead seek dialogue.

The debate over the debt ceiling essentially lies in how to control government spending. But the question is, where does the massive spending that the US government cannot make ends meet come from? The Wall Street Journal noted that compared to the high-profile non defense spending between the two parties, the growing US defense spending has been deliberately ignored by both parties. In the eyes of some scholars, military spending, as the elephant in the room, is the most worthy of attention compared to the torn US debt.

On June 1st, Senate Majority Leader Schumer stated that the debt ceiling agreement will not limit the Senate's ability to pass so-called "defense aid programs.".

Senate Democratic Leader Schumer: This debt ceiling agreement will not limit Senate funding for emergency replenishment to safeguard our military capabilities.

A day ago, the United States announced a new round of military assistance worth $300 million to Ukraine, including anti-aircraft missiles, Hamas rocket systems, and more.

Texas Senator Corning: I'm worried about the defense numbers, I'm worried that Senator Schumer could manipulate the bill and force us into a funding process, which would be terrifying. We did this last year, it was an ugly process.

Claiming that they do not want the situation between Russia and Ukraine to escalate, but constantly adding fuel to the fire in practical actions; Despite passing a bill to restrict government spending, the US defense budget will continue to rise by 3.3% next year. It's really a show of doing one thing at a time.

Democratic Senator Sanders: Tonight, the American business community is very happy, and the wealthiest people feel good that they don't have to pay an extra penny in taxes. The fossil fuel industry feels good and has embarked on a fast lane that we don't need. There is also a military industrial complex, which will cost $56 billion in the next two years, which is not bad, right.

In addition to previous US governments spending money on food, The New York Times also noted that since 2000, politicians from both parties have developed a habit of borrowing money to fight.

On May 23rd, US presidential candidate Robert Kennedy Jr. forwarded an article by Jeffrey Sachs, a former special advisor to the United Nations Secretary General and economics professor at Columbia University, titled "The War and the Debt Crisis of the United States.".

The article points out that in 2000, the federal government debt of the United States was $3.5 trillion, equivalent to 35% of the country's gross domestic product that year. Assuming that the proportion of federal government debt in the United States remains around 35% of GDP, as it did in 2000, today this debt figure will only be around $9 trillion. And now that this number exceeds 31 trillion US dollars, where does the excess come from?

Sacks, an economics professor at Columbia University in the United States, said that since the beginning of the 21st century, we have actually been engaged in non-stop wars. Afghanistan, Iraq, Syria, Libya, Yemen, and now Russia-Ukraine conflict. We spent a lot of money, but no president told us that these wars are so important that we should pay taxes for them. They just issued bonds and borrowed money.

According to the Watson Institute for International and Public Affairs at Brown University, the United States spent an astonishing $8 trillion on launching wars from fiscal year 2001 to fiscal year 2022. This number is almost equivalent to the sum of the valuations of Japan and India's full year GDP in April 2023 in the International Monetary Fund's World Economic Outlook.

Robert Kennedy Jr. comes from the famous Kennedy family in the United States. On May 7th, when recalling the assassination of his uncle, the 35th President of the United States, John F. Kennedy, he pointed out that the CIA was behind the scenes.

Voice source Robert Kennedy Jr.: There is overwhelming evidence that the CIA was involved in his murder, and there is no doubt about this.

"When my uncle served as president, he was surrounded by military industrial complexes and intelligence agencies, which constantly tried to drag him into wars in countries such as Laos and Vietnam."

In his view, John F. Kennedy's refusal to continue sending US troops to the outside world offended some belligerent interest groups in Washington.

Robert Kennedy Jr.: John Kennedy realized that the function of American intelligence agencies had become a conduit for providing ongoing warfare to the military industrial complex.

In 1968, the Vietnam War reached its peak, and his father Robert Kennedy ran for the presidency of the United States. In response to the rising anti war sentiment in the country, he proposed a three-point plan to end the war, including suspending US bombing of the Democratic Republic of Vietnam. In June of that year, Robert Kennedy was also assassinated.

Robert Ken Jr