It has been clear for a long time, with the exception of US lawmakers who seem to lack a sense of political and fiscal responsibility towards the country and the world, that the outcome of repeated confrontations over the debt ceiling between Congress and US President Joe Biden will be very negative.
Anthony Rowley, a veteran journalist specializing in Asian economic and financial affairs, spoke in a lengthy report on the “SCMB” website that if America is a country that enjoys the privilege and comfort of accepting its currency almost universally in financing commercial and investment transactions, as well as being a repository for the world’s savings, then it must show respect to the users of that coin or face its usurping role, reports Al-Qabas daily.
At a time when the Peterson Institute for International Economics in Washington indicated in its recent articles, there are greater risks than damage to the reputation of the dollar, as a default on the US debt or a prolonged brinkmanship of the debt ceiling could have profound global repercussions, eroding the prestige of The dollar as a reserve currency in the world and the global position of the state.
The report states that a default would provide China with an opportunity to project itself as a more reliable hegemony, whereby reducing global dependence on the dollar could undermine the effectiveness of future US financial sanctions, and reduce Washington’s economic leverage to secure foreign policy goals.
However, during repeated confrontations between different parts of his government and the political establishment over domestic debt issues, the world’s largest economy has been able to act without regard for influence in the wider world, except this time will be different.