German Finance Minister Wolfgang Schaeuble asked how America could handle its enormous national debt after the election in November.
In Schaeuble’s speech to commence a debate on the German budget for 2013, he said concerns about U.S. government debt were affecting the global economy.
In private, German government officials frequently convey concerns about the high U.S. government debt and the failure of politicians in the country to create a plan that will lessen the debt, but the finance minister emphasized the severity of the Germany’s concerns.
According to Schaeuble, there is a great anxiety in regards to the direction the U.S. politicians are going to take in dealing with the nation’s very high debt. They have to be reminded of that occasionally since the global economy is affected by it.
A political congestion and fragile economy have hindered serious debt reduction programs in Washington, which has incurred budget deficits as much as $1 trillion for the past three years.
This particular issue is the main topic of Mitt Romney’s campaign. The Republican presidential candidate accuses President Obama of economic mismanagement, and the administration slams Republicans for barring government initiatives to improve the economy by putting the fiscal house in order.
In 2011, U.S. Congress agreed to a last minute deal that raised the Treasury Department’s borrowing cap, which had collided with a legal borrowing limit, steering clear of a government default on its bills.
But the U.S. will probably cross a $16.4 trillion debt ceiling by the end of 2012, according to Treasury Secretary Timothy Geithner.
The Organization for Economic Cooperation and Development (OECD) has discouraged an abrupt fiscal cut in, as this will likely halt America’s slow economic recovery.
Until the politicians come up with a plan, a series of tax increases and spending cuts, referred to as the fiscal cliff, will take effect in 2013, which is barely two months after the election.
German Chancellor Angela Merkel and Obama have similar stance on a lot of foreign policies.
However, members of the chancellor’s conservative party are more open to the focus of Romney’s campaign on deficit reduction.
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