Puerto Rico residents have been US citizenship and military service since 1917, but are not eligible to vote or pay taxes in the US. The island’s economy has been shrinking for seven years.

July 2015. (Photo: REUTERS) The budget debate in the USA is dominated by the primary campaign. Neither party wants to risk a shutdown now. If politicians don’t want to do anything about the overwhelming national debt, the Fed can do it. Economically, the US is currently a bit of an ideal world – one might think. The framework conditions for the state budget are almost perfect. Interest rates are record low, feedback from the job market is positive, incomes for Americans are rising and so are tax revenues. US economic growth is 2.8 percent.

At the same time, the debt “only” increased by around 2.5 percent. At first glance, that’s good news. The state’s new debt this year is expected to be $ 426 billion this year, according to estimates by the CBO Budget Office. This is the smallest deficit in eight years, and a second look reveals that the United States is not walking the path of virtue.

The gross domestic product (GDP) is currently growing faster than the mountain of government debt – at least slightly. The national debt, i.e. the total accumulated debt of the US state in relation to GDP, only drops from 103 to 102.7 percent. A liberation blow looks different: The fact that the government under President Barack Obama unrestrainedly piled up trillions of lousies during the financial crisis is largely responsible for the fact that the national debt is hardly falling.

The United States is now sitting on a gigantic mountain of debt. The $ 19.0 trillion barrier will soon be broken. Normally, the budget dispute in the United States is a tremendous game. Business, investors and investors quiver as Republicans and Democrats compromise on their irreconcilable positions on the debt ceiling. It can never be ruled out that there will be an “accident” and that the US state is technically insolvent in the meantime. The explosiveness of the debt ceiling became apparent two years ago.

At that time there was a 14-day “Government Shutdown”. Many authorities had to close because salaries could no longer be paid. Those who weren’t needed went home.

It was only at the last second that the parties reached an agreement in the US Congress and decided to simply suspend the annoying debt ceiling, which could not limit the debt anyway. This year the debate is dominated by the US primary campaign. Chaotic conditions cannot be completely ruled out, but neither party wants to be responsible for a shutdown. So there will be no chaos like 2013. Also because, since the Obama presidency, the debt cap has never been so loose.

The lid is simply readjusted, so the situation has not gotten any better. Another fiscal year comes to an end at the end of the month, and the new one begins in October.biology essay service reviews This year, too, the USA is theoretically facing insolvency again. The debt ceiling, the self-imposed ceiling, fell in March.

The crossing of the limit can only be delayed until the end of the year through extraordinary measures. This has become routine, there is no solution. Debt management in the US is a vicious circle. Despite perfect framework conditions, despite a lot of “lubricant” in the form of dollars from the Fed’s printing press, the world’s largest economy is not coming off its mountain of debt. The USA even enjoys an advantage over Europe.

The banks were restructured faster. Loans were granted faster. The real economy thus benefited more from the additional money in the economic cycle. But even that only works homoeopathically in the fight against the piling up debt. This is precisely the reason why the central banks are pursuing their ultra-loose monetary policy and trying to fuel inflation. Experience shows that states can only manage to pay off their real mountains of debt when economic growth and monetary devaluation come together.

The Americans did it once before – after World War II. Rising GDP and thus growing tax revenues alone are apparently not enough to reduce debt, which could also be one reason why the Fed has postponed its announced interest rate hike until the end of the year. The low interest rates also depress the interest burden of the state. Currently, only an estimated 1.85 percent of economic output has to be paid in interest.

This is the lowest figure since 1973. In 2002, ex-Fed chairman Ben Bernanke summed up how the US intends to pay its debts: “The US government has a technology called the printing press that allows it to do so at no cost many dollars to produce as she wants. ” First experts expect the US to skip a key rate hike, instead launch another bond purchase program and flood the financial markets with billions of dollars again. However, miracles are still not to be expected. It doesn’t increase the politicians’ willingness to save either. Source: ntv.de “” Puerto Ricor is broke. (Photo: picture alliance / dpa) Federal Finance Minister Schäuble wanted to swap Greece for Puerto Rico out of joke. He had to take clear criticism for his statements.

Now it turns out that it would have been a bad swap. The debt crisis of the Caribbean island of Puerto Rico, which is associated with the USA, has reached a new high point: As the US rating agency Moody’s tag announced, Puerto Rico was unable to repay bonds that fell due on Saturday . “Moody’s evaluates this event as a default,” said the rating agency’s vice head of the investment service, Emily Raimes. It can be assumed that further payment defaults followed. The joke by Federal Finance Minister Schäuble could come back as a boomerang. (Photo: picture alliance / dpa) A public bond from the state Public Finance Corporation (PFC) for a total of 58 million dollars (53 million euros) is The development bank of Puerto Rico announced that only $ 628,000 was served. The necessary funds are not available, it said in a statement. Puerto Rico was a Spanish colony until 1898 and, like some other Caribbean islands, is associated with the USA.

Puerto Rico residents have been US citizenship and military service since 1917, but are not eligible to vote or pay taxes in the US. The island’s economy has been shrinking for seven years. Due to its special status, Puerto Rico with its 3.5 million inhabitants cannot officially file for bankruptcy. A default could therefore result in years of negotiations to resolve the crisis. The country has a total of around $ 72 billion in debt, so it comes as no surprise that bills are no longer being paid. Puerto Rico’s governor Alejandro García Padilla had already announced payment defaults at the end of June if the creditors did not make any concessions: “The goal is a moratorium to postpone the settlement of debts for a few years.” At the beginning of July, the state energy supplier Prepa could only be barely prevented is in default of payment.

The rating agency Standard Poor’s had already stated in mid-July that bankruptcy on the Caribbean island was “practically a certainty.” At the beginning of July, Federal Finance Minister Wolfgang Schäuble (CDU) jokingly declared, “I recently offered my friend Jack Lew that we could take Puerto Rico into the euro zone, if the US took over Greece into the dollar zone. ” Schäuble added: Lew thought “that was a joke”. Schäuble received heavy criticism from the opposition and was then under attack in the Greek media. Source: ntv.de, bad / AFP / dpa “News and information at a glance. Collection of articles by n-tv.de on the subject of US debt crisis disappointing Economic data from the USA and the ongoing uncertainty caused by the debt crisis and unilateral regulatory initiatives give investors on the German stock market an uncomfortable Thursday. After all, the Dax can move a good bit away from its daily low by evening. The debt crisis in the euro zone dominates for The week ended with trading on Wall Street, with positive economic data in the USA receiving little attention on the New York floor.

Stock exchanges in Asia are recording losses. Good guidelines from the USA pale before the debt crisis in Greece and decisions by the central banks in Beijing and Sydney. The stock markets in the Far East start the week with price gains.

In addition to the USA, the Greek debt crisis is again playing a major role in the markets. After the Mediterranean country’s request for help, investors are prepared to take risks again. The euro continues to gain. The common European currency benefits from the fact that the USA continues to keep its interest rates at its low level. In addition, concerns about the possible consequences of the Greek debt crisis for the euro zone continue to ebb.

Disappointing economic data from the USA and the ongoing uncertainty caused by the debt crisis and unilateral regulatory initiatives give investors on the German stock market an uncomfortable Thursday. After all, the Dax can move a long way from its daily low by evening. The debt crisis in the euro zone dominated trading on Wall Street at the end of the week.

Positive economic data in the USA attract little attention on the New York floor. Stock exchanges in Asia are recording losses. Good guidelines from the USA pale before the debt crisis in Greece and decisions by the central banks in Beijing and Sydney. The stock markets in the Far East start the week with price gains. In addition to the USA, the Greek debt crisis is again playing a major role in the markets.

After the Mediterranean country’s request for help, investors are prepared to take risks again. The euro continues to gain. The common European currency benefits from the fact that the USA continues to keep its interest rates at its low level.

In addition, concerns about the possible consequences of the Greek debt crisis for the euro zone continue to ebb. “Because Germany produces more than it consumes itself, it sells a lot of goods to other countries – for a long time more than has been imported. (Photo: picture alliance / dpa) Germany will probably achieve the highest balance sheet surplus in the world again in 2018. The USA see this One reason for a lack of jobs in one’s own country – wrongly, say Ifo researchers. The institute sees no connection with high unemployment abroad. The Munich Ifo Institute has defended countries like Germany in the debate about the consequences of strong export balances Current account surpluses are not responsible for unemployment in other countries, the economists explained in a published study. “The conclusion that countries with high surpluses enriched themselves in the labor market at the expense of deficit countries seems to be incompatible with the data,” wrote Co- Author Martin Braml. This connection is no longer recognizable as soon as special features are added. ” et point out that the current account surplus and the unemployment rate are determined by other factors. “These included, for example, population growth, but also minimum wages, the flexibility of labor markets or state security. Ifo foreign trade expert Gabriel Felbermayr added, Ifo foreign trade expert Gabriel Felbermayr, several groups of countries were examined over different periods of time for the allegation that high surpluses in the current account or net exports lead to lower domestic unemployment.

In addition to the trade balance, which records the exchange of goods with foreign countries, the balance of services, the balance of income and foreign assets as well as the balance of transfers such as guest worker remittances at home or development aid belong to the current account of a country. Because Germany produces more than it consumes itself, it sells a lot of goods to other countries – for a long time more than has been imported, according to Ifo calculations, Germany is likely to achieve the highest current account surplus in the world for the third time in a row due to its strong foreign trade . Above all, the USA criticize that this is at the expense of its own economy, because it replaces its own production and also increases debt, for example through credit-financed imports.

President Trump justifies his high tariffs in this way. The IMF and the EU Commission see high surpluses as the reason for imbalances, and the Ifo does not consider current account surpluses to be harmless either. “There are some indications that large surpluses or deficits can lead to crises due to the debt that goes along with them,” said Felbermayr. Any labor market effects are no justification for demonizing current account surpluses. Source: ntv.de, lri / dpa “Economic growth on credit – IMF fiscal chief Vitor Gaspar sees a bad example in the USA. (Photo: picture alliance / dpa) The global economy is booming, but public finances are often built on debt.

Worldwide, however, the International Monetary Fund sees a positive development in terms of national debt – with one major exception: The International Monetary Fund (IMF) warns of a threat to the current strong economic growth from excessive debt levels. In almost all developed economies, the debt ratios – the ratio of debt to economic output – are likely to fall in the coming years, as IMF fiscal chief Vitor Gaspar said in Washington. However, there is only one country where this is not the case: the United States, where national debt will fall in two-thirds of the countries in the coming years – provided they keep their promises. After a major tax reform, the US will add a trillion dollars of new debt annually to its already gigantic debt over the next three years.

The budget deficit would then be more than five percent of annual economic output, it is said. As a result, the government debt ratio will rise from 108 percent in 2017 to 117 percent in 2023. If the tax breaks do not expire as planned, the ratio will rise even more. According to the IMF, the US debt at the end of the forecast period will only be accounted for by Japan ( 229.6 percent) and Greece (165.1 percent).

Even Italy’s debt level will then be lower, according to the IMF, at 116.6 percent. The IMF anticipates that the average national debt of the euro area will decline from 86.6 percent in 2017 to 71.7 percent in 2023. Compared to the previous year, the IMF sees a slightly higher risk of short-term threats for the global financial system.