Tuesday, July 19, 2011
Is The United States Going To Default?
A few weeks back the famous American magazine Foreign Policy Magazine published a report about failed states and enlisted Pakistan at twelve th number. This shows the mentality of the American think tank, though law and order situation in Pakistan is bad but the situation is so worst that it may be enlisted in the row where Somalis and Afghanistan stand. Do not they observe that Pakistan Pakistan is at 5th number in agricultural production in Islamic world and ranks 20th in thee world. Pakistan has second biggest coal reserves in the world (1857 billion tons, Pakistan is second in the world in producing gram, in apricot, cotton and sugarcane production (4th), milk and dairy products , onion (5th), rice (8th) while in wheat production it is on 9 number in the world. In addition,Pakistan is rich in mineral wealth. Having all this wealth how it can be a failed state? But what the USA thinks about itself in-spite of huge volume of debts. Let us have a look at the economic condition of the USA:-
The total volume of USA's internal debt has reached to the level of $ 14.32 trillion that equals to its total GDP. This way United States is under a heavy load of loans. It means that American government spends more that its income.
Obama administration is trying to get the debt limited increased by the congress to $16 trillion. It is worth mentioning that no limit of loans is fixed in other countries including Pakistan.But in the USA congress fixes the limit. Therefore talks have been initiated between government (Democratic party) and the opposition (Republican Party).
The problem is that congress has to extend the limit by August 02, otherwise American government will default and the honor would go to Obama government. Obama is trying to avoid the extreme situation, it is hoped that congress would increase the internal loan limit by the scheduled date.