Foreign creditors very worried about looming default
U.S. could lose credit rating, Congress doesn't care.
Countries around the world are growing anxious as the U.S. nudges closer to a default on its debt repayments. If the deadline passes on Oct. 17 without agreements to pay debts to foreign countries, those nations could suffer as a result.
The Republican strategy hold the feet of the Democrats to a virtual fire, but Democrats have succeeded in blaming the Republican party for the worst of the impasse and as long as the public accepts this belief, Democrats have very little incentive to negotiate.
Meanwhile, the international community, particularly China and Japan, two of the largest foreign creditors, are imploring the U.S. to reach an agreement soon and to pay their debts on time. Late payments could prove disruptive to those economies.
International ambassadors are appealing to the Obama administration to sit down and talk to Republicans to reach a deal. On Monday, Chinese Vice Finance Minister Zhu Guangyao made comments about the crisis saying that China was "naturally concerned" and that he had been in touch with U.S. representatives over the issue.
If Congress does not approve a debt ceiling increase by October 17, scheduled payments to foreign creditors will go without their influx of American cash. This could cause foreign investors and governments to be stuck without money to finance their operations forcing disruptive changes to their plans and policies. The longer the impasse runs, the worse the impact.
Of course, the United States would lose its prime AAA credit rating as part of the failure. This would increase borrowing costs for the government and make future borrowing more expensive. Future generations would pay higher interest on a larger debt.
Unfortunately, Republicans and Democrats don't care too much about future generations and interest payments. Instead, members of Congress are greatly concerned about reelection, which is only possible if they two absurd and extreme party lines, refuse to negotiate with one another, and generate massive campaign contributions from their handlers to whom they are beholden.
The considerations of the American people do not matter. The considerations of foreign people matter even less.
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Pope Francis Prayer Intentions for March 2014
Respect for Women: That all cultures may respect the rights and dignity of women.
Vocations: That many young people may accept the Lordís invitation to consecrate their lives to proclaiming the Gospel.
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