America’s Debt-Ceiling Debacle
Over-reliance on debt finance has strained the fabric of the democracies that it has helped to fund, with government finance increasingly determined not by electoral cycles and political deliberation, but by repayment schedules. Europe and the US must devise a better way to manage debt – one that does not undermine self-governance.
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NEW YORK – When Greece’s sovereign-debt crisis threatened the euro’s survival, US officials called their European counterparts to express bewilderment at their inability to resolve the issue. Now, the tables have turned, with American leaders on the receiving end of such calls. The most recent threat of a US debt default has been avoided, but only temporarily. Another battle looms early next year, when the US government’s debt ceiling will have to be raised again.