U.S. Debt Drama: Why the World is Watching

With days to spare before a potential U.S. debt default on June 5, months of political gridlock in Washington have shaken global confidence in the world’s largest economy. From inflation woes to banking sector tremors, experts warn the stakes go far beyond America’s borders.

A Global Economic Tinderbox

Jeffrey Sachs, Director of Columbia University’s Center for Sustainable Development, called the U.S. debt standoff a "self-inflicted crisis," stressing the dollar’s dominance means "everyone feels the ripple effects." A default could spike borrowing costs worldwide, destabilize markets, and slow growth from Asia to Europe.

Politics Over Progress?

Tsinghua University’s Li Daokui highlighted how political polarization in the U.S. has overshadowed solutions. "This isn’t just about numbers—it’s about trust," he said, noting that repeated brinkmanship risks eroding the dollar’s status as a global safe haven.

What’s Next?

While a last-minute deal may avert disaster, Sachs argues the chaos underscores the need for a "multipolar financial system" less reliant on the dollar. For now, the world watches as Washington’s political theater threatens to upend the economic stage.

Reference(s):

U.S. debt and the global economy

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