With Persistent US Debt Crises, Hong Kong Cannot Relax
Published in Wen Wei Po
(Hong Kong) on 21 October 2013
by Editorial (link to original)
(Hong Kong) on 21 October 2013
by Editorial (link to original)
Translated from
by Kim Wang.
Edited by Philip Lawler
.
Yesterday, Hong Kong Financial Secretary John Tsang announced on a blog that the U.S. Democratic and Republican parties had finally reached an agreement on raising the debt ceiling. However, this agreement will only help the U.S. maintain debt until Feb. 7 of next year, when the same problems will reappear. In fact, the alarm bell ringing on the U.S. debt ceiling issue has become commonplace. Hong Kong will inevitably be troubled by this issue and should therefore be prepared to take extra precautions in case the situation deteriorates. The United States prides itself on its financial hegemony. Irresponsibly delaying progress with the debt problem is bound to lead to deeply embedded problems, undermining America's international influence and pushing the country toward the point where it is marginalized on a global scale.
As in the past with the U.S. debt ceiling issue, the U.S. House and Senate decided at the last minute to raise the debt ceiling in order to solve the default crisis, relieving the world with an avoidance of disaster. In fact, the U.S. debt crisis has led to political and economic problems within America's structure, and will continue to recur again and again. Since the 1960s, the U.S. debt ceiling has been raised 80 times to its current debt at $17 trillion, equivalent to occurring on an average of once every eight or nine months. Both houses once again raising the debt ceiling makes international financial markets nervous. Hong Kong, with its small and open economy, is an international financial center. With the Linked Exchange Rate System and financial linkages with the U.S. economy, Hong Kong is inevitably impacted by the U.S. debt ceiling crisis. If the U.S. defaults, the impact on Hong Kong is difficult to predict. Despite the markets generally not fearing a U.S. default, the Hong Kong government remains vigilant and prepared to deal with the worst case scenario; as soon as crisis with the U.S. debt is triggered, the government will maintain our financial markets and ensure economic stability within the system.
U.S. bonds undergo unbridled expansion to match growing domestic, political, economic, day-to-day and military needs — this instead of considering savings to reduce the deficit, which leads the U.S. debt to snowball at an increasingly faster rate. It will not take long to hit the limits, which increases the difficulty of solving the problem. Failing to raise the debt ceiling has been used by America's political parties as a weapon, placing political interests above the interests of the nation and of the world, and thus creating a stalemate. The U.S. debt crisis is expected to frequently reoccur and continue to have a larger impact on global financial markets.
As in the past with the U.S. debt ceiling issue, the U.S. House and Senate decided at the last minute to raise the debt ceiling in order to solve the default crisis, relieving the world with an avoidance of disaster. In fact, the U.S. debt crisis has led to political and economic problems within America's structure, and will continue to recur again and again. Since the 1960s, the U.S. debt ceiling has been raised 80 times to its current debt at $17 trillion, equivalent to occurring on an average of once every eight or nine months. Both houses once again raising the debt ceiling makes international financial markets nervous. Hong Kong, with its small and open economy, is an international financial center. With the Linked Exchange Rate System and financial linkages with the U.S. economy, Hong Kong is inevitably impacted by the U.S. debt ceiling crisis. If the U.S. defaults, the impact on Hong Kong is difficult to predict. Despite the markets generally not fearing a U.S. default, the Hong Kong government remains vigilant and prepared to deal with the worst case scenario; as soon as crisis with the U.S. debt is triggered, the government will maintain our financial markets and ensure economic stability within the system.
U.S. bonds undergo unbridled expansion to match growing domestic, political, economic, day-to-day and military needs — this instead of considering savings to reduce the deficit, which leads the U.S. debt to snowball at an increasingly faster rate. It will not take long to hit the limits, which increases the difficulty of solving the problem. Failing to raise the debt ceiling has been used by America's political parties as a weapon, placing political interests above the interests of the nation and of the world, and thus creating a stalemate. The U.S. debt crisis is expected to frequently reoccur and continue to have a larger impact on global financial markets.