Don't Miss


Home   >   Business   >   Industries   >   Economy   >   US politicians struck a deal to solve cash crisis

US politicians struck a deal to solve cash crisis

By on August 1, 2011

US politicians finally struck a deal to solve their cash crisis last night, saving the world from economic ruin.

President Barack Obama announced that Democrats and Republicans agreed a plan to raise America’s debt ceiling to $17TRILLION.

He said the agreement will cut spending by $2.5trillion over ten years. The deal followed weeks of wrangling that brought America to within hours of running out of money to pay its huge debt repayments. It would have caused global financial meltdown.

Mr Obama said: “There are still some very important votes to be taken by members of Congress, but I want to announce that the leaders of both parties, in both chambers, have reached an agreement that will reduce the deficit and avoid default — a default that would have had a devastating effect on our economy.

“Now, is this the deal I would have preferred? No. But this compromise does make a serious down payment on the deficit reduction we need, and gives each party a strong incentive to get a balanced plan done before the end of the year.

“It will allow us to avoid default and end the crisis that Washington imposed on the rest of America. It ensures also that we will not face this same kind of crisis again in six months, or eight months, or 12 months. And it will begin to lift the cloud of debt and the cloud of uncertainty that hangs over our economy.

“This process has been messy and taken far too long. Nevertheless, ultimately, the leaders of both parties have found their way toward compromise. And I want to thank them for that.

“Most of all, I want to thank the American people. It’s been your voices — your letters, your emails, your tweets, your phone calls — that have compelled Washington to act in the final days. And the American people’s voice is a very, very powerful thing.”

President Obama had warned politicians they had until tomorrow to reach a deal – or face defaulting on payments. It could even have resulted in troops in Afghanistan not getting paid. The knock-on effect could have included a new global recession. Interest rates could have soared, increasing mortgage bills.

Right-wing Republicans of the Tea Party have been accused of blocking attempts to find a solution and “behaving like the Taliban”. The deal still needs to be rubber-stamped by Congress today.

Sun