Unless a new deal is reached on the level of the national debt, the US could be out of cash by June 1. If Democrats and Republicans do not agree, the country is technically bankrupt, says US expert Willem Post on NPO 1’s Goedemorgen Nederland.

Americans’ national debt is $32 trillion. This needs to be increased or else they will have a big problem. America struggling with such a high national debt is nothing new. Not that it was increased in between. “This has happened at least 70 times in the last 70 years,” the post says.

Negotiations

Whether you have Republicans or Democrats in the White House, increasing the national debt is a piece of cake. That has changed over the past ten years, the Post says. The polarization has grown enough that Republicans in Congress, who hold a slim majority in the House of Representatives, are asking President Joe Biden to make some cuts if they want Republican support.

Not for protection, especially in social services like providing food stamps to those with little or no work. But Biden has indicated that he does not want to negotiate because it is a habit in the United States to raise the national debt. “And yet they do it every day,” Biden said, referring to sitting across the table from Republican House Speaker Kevin McCarthy. “I think it will work out in the end, but Biden is in a tough spot.”

‘The Depression of the 1930s’

If Republicans and Democrats don’t agree before June 1, the government can do very little. Interest on the national debt has to be paid at the expense of pensions and salaries of civil servants. “That’s a big problem and you want the puppets to dance,” Post says.

It’s a bleak scenario, but “it’s the right kind of destructive thinking,” Post says. Because there are caveats. “The good news is that America is falling into some kind of abyss that is dragging the whole world into a 1930s depression. I don’t think you want this on your conscience. If you have some dignity, make sure you have a deal.

Entrepreneurship Netherlands

If the US goes bankrupt, it will also have consequences for Dutch entrepreneurs, says MKB-Nederland President Jacco Vonhof. “It’s about confidence. If confidence falls anywhere in the world, stock markets react.

“If America’s credibility is called into question, it is not good for the economy, interest rates and inflation. In this case we don’t want it because there are some economic challenges,” Post added.

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By: Vic Den Volt