Update: The situation has been resolved, and the financial stability has been restored. On June 1, 2023, the United States experienced a shocking bank

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What I mean to say is that the story in U.S. media about U.S. economy is that it will become as good as Pakistan, on June 1, 2023. What it means? The connection between politics, business, and the economy are inseparable in the U.S. – that holds them together, not make another great fall. You can trust all of them.

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I read many reports about U.S. being at the brink of getting defaulter. Treasury Chief Janet Yellen made a statement that U.S. under serious risk of default in payments if debt ceiling is not raised. As good as we have heard these days about Pakistan being at the brink of default. This story means – a danger and a politically motivated threat. It is not at all full economics statement if you know U.S Economics. It has major portion of politics, and this statement is a threat to Senate (In Indian terms – Parliament) by Republicans holding majority in House of Representative and forcing senate to cut down 14% of its budget to raise debt ceiling. It is just an arm twisting by opposition, and opposition is performing its duty.

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See, as I am not an economic journalist, and for my reader I need a layman’s term explanation on the above statement made by me. Please – let me elaborate the impact first. In U.S. – The Capital forms Government, and history indicates that capitalism is a necessary condition for U.S. political freedom concept. Clearly, it is not a sufficient condition, it has many other things too.

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For your kind information - $ is used in minimum 65 percent of the world trade. It means U.S. default will make impression on world economy. A short crack down would be "enough to undermine the already fragile U.S. economy. But if the breach lasted longer than that, the U.S. could fall into a "deep recession, but not repairable soon" with employers cutting 7. To 7.5 million jobs vaporisation and that may leads to the jobless rate jumping to 8%, or about double its current level, higher then 1929 recession. Relax this is just an assumption. This is all politics, its not going to happen. Media making blush on politicians – and – media likes it – a part of job. If U.S economy sinks, it will force world top 65 percent economy to make a nosedive. But it is also a fact that the countries at economic risk are in favourite list of U.S. and that’s the worry point. ?

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Having said that now please let mw tell you what the political part of this crisis is, and I will try to open this area a little wider for my readers. U.S. society in which nearly everybody is dominated by somebody else's mind or by a disembodied mind, it becomes increasingly difficult to learn the truth about the activities of governments and corporations, about the quality or value of products, or about the health of one's own place and economy. Hence despite trillion-dollar economy is still in debt trap and still wants to borrow.

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See I am not an economist neither a politician, but yes I do understand some parts of eco-politics of World Economy. The political part first you need to understand the U.S. democratic setup. And opposition strong hold in which house and senate. I mean like India has – Lok Sabha and Rajya Sabha similar is in U.S. two houses - U. S. House of Representatives and Senate. Where House of Representative has opposition majority, and this kind of bill needs to be passed in both the house. The bargaining point is in the hands of Republicans adding three independents supporting – Former President Donald Trump’s Party – the republicans, and Joe Biden, where is to keep a note Biden wanted to give bigger space in prison to Republicans mascot Donal Trump. The Bill is paused. ?

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Now Republicans want – Democrats to cut down its expenses by 14% to pass the bill to raise debt ceiling and other commitment which is not documented. Already last year U.S senate has taken $550 Billion and now they are demanding more money this year it is increased to $726 Billion plus.

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The politics of give and take is everywhere, and it is in U.S. too. But I am assuring you, that U.S. will be able to convince Republicans by overleveraged political commitment behind the scenes. Nothing wrong is going to happen.

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Sorry, I should have explained first – what is the meaning of U.S. Default, as I know U.S. Economy is of ?23 trillion. I mean it is big question – How U.S. will be out of cash i.e. cashless or with less cash?

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To understand this – you need to understand first how government runs on economic front. Specially and generally – U.S. or any Government earns money from – (Tax and Loan), it is way of earning. In individual case loan is not earning, in country economics it is earning. Tax – as usual government collects direct tax from individuals and indirect tax from business but that too ultimately paid by consumers, example in the name of GST and etc.

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The loan can be arranged by domestic borrowing and international borrowing. In case of domestic borrowing in U.S. Government issues bonds and banks buys it funds to government, and at international borrowing – many institutions and countries by those securities and again they allow banks to give money.

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This is the source of earning of a government to run its schemes, pays salaries, secures borders and during bank run bail out – is part of U.S. Economics. Which is very bad. The major part is as per my understanding one should know GDP to debt ratio to understand better about the economic situation. GDP to debt ratio of U.S is very poor 121% and means GDP is 21.44 Trillion and debt is 37 trillion dollar, that is overleveraged economy. To understand better Indian GDP to debt ratio is 57.3%, it means if India earns $100 it has $57.3 as debt.

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Having said that – U.S. Economy is very strong and secured hence, people and country across the globe invest in it. And entire American Government and Business models is on debt. You can see in daily life – average American Businessman uses debt model to start or grow the Business.?

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So the question is - why one – Individual or Government takes loan above their earning limits. What is my take on it and to understand this I will explain GDP to debt ratio of U.S. is 121% approx. and India is 57.3% approx., still international rating of India is – BB(-) and U.S is AAA+. Your take.

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Still I am saying, I am not an economist, but I will try to spot some light in a layman’s tongue. Every Government takes ultimately – the money from people to spend on people. This is known as Budget. Where govt spends money on – Salaries, Roads, ports, Défense, and freebees to buy vote. And that is why Republicans wants to cut down 14% of total loan requested by U.S. Government, so that they should not make more freebies and earn vote.

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Now, about rating, U.S. economy runs many countries economy, many countries profit comes from U.S. profit and many other economic reasons puts U. S. on AAA+ ratings. They have good earning sources and secured.

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My final conclusive take on U.S. Treasury Secretary statement I mean the Finance Minister of U.S. dumpling statement about cash run from June 1, 2023, is fully political. The debt ceiling doesn't authorize new spending in my view; but yes it is going to allow U.S. to pay obligations already incurred. U.S. needs to get rid of the debt ceiling law. It's anachronistic and it's a problem.

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U.S. is one of the finest economies, and the politicians are nationalist – both sides – opposition and ruling. They will negotiate to blame each other, but none of them are – anti American. The citizens are patriot, and Government formed by any party in US – is nationalist for U.S.. They will save U.S. to save the World. That is U.S. beauty. God bless America.

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