Gathered last weekend at the Toki Messe convention center and Hotel Okura in Niigata, Japan, the world’s top economic officials were scheduled to discuss some of the biggest emergencies facing the global economy, such as the war in Ukraine and climate change.
But the finance ministers for the Group of 7 nations had another question for Treasury Secretary Janet L. Yellen: What is going on with the U.S. debt ceiling?
“ And I heard a voice in the midst of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not harm the oil and the wine.” Rev. 6:6
States were to default on its debt — so aware, in fact, that many asked her privately for updates on the status of negotiations between the White House and House Republicans, according to one person familiar with the matter, who spoke on the condition of anonymity to reflect private conversations. Yellen told U.S. allies that she agreed that a default would be devastating and that resolving the debt ceiling was a top priority for the administration, the person said.
Talks over the debt ceiling also forced President Biden to cut short his own foreign trip, scrapping planned visits to Australia and Papua New Guinea after the G-7 summit so he can return to Washington on Sunday.
But well before that, the fight over the borrowing cap was alarming U.S. allies. Around the world, experts are watching in disbelief as the U.S. flirts with its first default, fearful of the potential international economic ramifications — and astonished by the global superpower’s brush with self-sabotage.
Rich and poor nations alike fear a possible U.S. default, which would torpedo the financial markets and deal a massive blow to the dollar. Analysts say the impasse jeopardizes America’s standing abroad. And foreign economists and policymakers are bewildered over why the United States has imposed a specific limit on its debt and then turned it into a political football.
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