Law on the debt ceiling in the US will avoid an economic crisis

The President of the United States, Joe Biden, announced last night that today he will sign the bill that authorizes raising the debt limit, which eliminates the threat of lack of liquidity in one of the most solid economies in the world.

“Nothing would have been more irresponsible or more catastrophic than a bankruptcy of the first world power,” he said.

With Biden’s ratification, the United States will avoid the suspension of payments that would have occurred immediately if it had not reached the Congress an agreement to raise the debt ceiling, which limits how much the American giant can borrow and can only be raised or suspended through legislative action.

Despite the fact that the measure contemplates some ceilings on public spending in areas such as health, education, justice or environmental protection, Joe Biden assured that the suspension of payments “would have sent the country into a recession”.

The president assured that “there were extreme voices” that led the United States to suspend payments and nothing would have been more irresponsible than that because more than eight million people would have lost their jobs. “We avoided a crisis and economic collapse“, he added.

In the words of the democrat, “nobody got everything they wanted —because of the fight against the republicans— but the American people got what they needed.”

It is worth noting that the measure suspends the current debt limit of US$31.4 trillion until January 1, 2025.

How does it impact Peru? Enrique Díaz pointed out to this newspaper that, since the United States is our main trading partnerThis measure will help us on the export side. In the event of a recession, we would have reduced the flow of departures as the payment capacity of the North American power contracted.