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Friday, February 23, 2024

Raising the debt ceiling divides opinions due to possible effects for Americans

US President Joseph Biden and House Republicans reached an agreement to raise the debt ceiling until January 2025 in exchange for spending limits for the next two years. However, the measure may not be enough to guarantee a stable economy, consequences that Americans would have to pay.

This was stated by specialists during a press conference organized by  Ethnic Media Services, in which they carried out an analysis on the subject and explained how the country's economy is affected or benefited.

The agreement comes at an important moment for the political figure of the president. By managing to join forces between the parties, Biden seeks to score points for the Democratic wing and leave a good impression before the next elections that will take place in 2024, where he seeks re-election. However, the topic must go far beyond politics and focus on people.

The debt ceiling is established by Congress and is the maximum amount that can be borrowed to finance government obligations that have already been authorized, and that when registering a budget deficit or considering that the income collected is not sufficient, it is sought raise it so as not to default. 

Rachel Snyderman, deputy director of business and economic policy at the Bipartisan Policy Center, expressed her concern in the negotiation of the agreement due to the list of priorities and the reductions that will be applied mainly in social programs, for which she recommended looking for new generators of income that does not affect citizens.

«The bill also failed to see new ways to generate revenue, we have a very large deficit and the bill is not doing anything to address that part. It's time lawmakers do something to generate revenue without considering taxes and then focus only on spending discretionary which is a small part of the budget», stressed the economist. 

To Snyderman, raising the debt ceiling is not enough, since it has been requested many times and in the end those affected are the citizens. For this reason, he proposed looking for other ways of collecting such as facilitating the procedures for companies and thus attracting investment that generates more jobs, or considering the Immigration to get new income. 

For Americans, having debt is worrisome. Interest costs become a government problem and social programs on which millions of families depend are no longer financed.

For her part, Shannon Buckingham mentioned that among the things that are at stake in this issue are the broad negative effects on the economy, a situation that citizens are well aware of because they know that they will be affected and their benefits may be delayed.  

«This agreement cuts part of the budget that covers education, job training, housing, food security and many areas of financing that are necessary investments for people, mainly for less favored communities.», he pointed out.

For her part, Lindsay Owens, executive director of the Groundwork Collaborative, explained that the decision to increase the debt ceiling is a necessary act to maintain the country's economy and avoid defaulting, which would generate more economic problems.

However, he agreed that it should be considered that inflation will affect the financing of resources and there will continue to be an economic loss for Americans.

«The increase will be reflected in cuts due to inflation, even if financing is frozen. In a world where inflation is 4 to 5 percent, inflation eats that part first and then there are 4 to 5 percent fewer resources available. They are 5 percent less in housing, we will see less resources for assistance in assistance, in programs for children and older adults. It is important to understand that, that this extra financing is not going to cover the effects of inflation», he pointed out. 

The measure approved this Friday has generated many political opinions, however, the issue of the country's economy involves the pockets of all citizens, so the debt ceiling between parties and characters should not be politicized. 

The experts concluded that it is necessary to see and analyze the measures taken, and how, since the debt ceiling was created, more than a century ago, money has not been raised in any other way, maintaining the effects on the most vulnerable.


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