A senior Pakistani economist said that US debt crisis may lead the country to bankruptcy. According to IRNA Dr Zafar Moeen Nasir Chief of Research at Pakistan Institute of Development Economics said that such development could also affect the economies of those countries which are based on US dollars.
US right now is facing a bitter deadlock over a deal to raise the debt ceiling which has already harmed the US economy.
Political parties of US, Republicans and Democrats, so far unable to reach a compromise, and are perusing rival budget plans, pushing the United States closer to a debt default.
The International Monetary Fund pressed polarized US politicians to raise the US debt ceiling “expeditiously to avoid a severe shock to the US economy.
The IMF warned that US debt would total 99 per cent of the size of the US economy this year and 103.0 per cent in 2012.
“The deadlock between Republicans and Democrats could lead the country to bankruptcy”, said Dr Zafar Moeen Nasir. He said that the issue is seriously damaging the US economy.
The economist said that dollar is becoming weak and many countries that have strong economies are changing towards other currencies.
“The credibility of American dollar is at stake”, noted Dr Zafar Moeen Nasir.
He said that the businessmen have lost faith in American dollars and they are looking for other options. Dr Zafar Moeen Nasir said that America itself is now facing serious economic problems.
The main issue that have caused a serious setback to the US economy is Washington's interference in the affairs of other states.
Its failure in the Middle East, particularly in Iraq and Libya … the losses caused by the decade-long war in Afghanistan, its intervention in Sudan, Somalia and other countries have led to the present decline in its economy.
Dr Zafar Moeen Nasir expressing his views said that the currencies of those countries which are based on American dollar are facing serious threat.
“There’s certainly evidence that the economy has suffered because of the uncertainty,” White House spokesman Jay Carney has said.
US President Barack Obama has warned that the United States is “almost out of time” to reach a deal to increase the $14.3 trillion dateline.
Washington hit its debt ceiling on May 16 but has used spending and accounting adjustments, as well as higher-than-expected tax receipts, to continue operating normally but can only do so through August 2
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