Sunday, July 24, 2011

The Republicans and demcratas negociacin still stuck to one week the deadline for bankruptcy

Trying to save something at the last minute of U.S. credibility as a major economic power, Congress moved yesterday to seek some form of agreement to avoid bankruptcy. Different options were advancing throughout the day, but none of them still has bipartisan support to solve this problem with long-term guarantees.

The chairman of the House of Representatives, John Boehner, Republican called the group throughout the evening to present what is considered a final proposal on their part. If this is not accepted by the Democrats, Boehner has warned that no further negotiations. What happens then? Nobody knows.

The damage that a suspension of payments, not Greece, but the U.S. can cause the world economy is so great that nobody can even imagine to reach the date of August 2 without a settlement. But the truth is that the positions are very opposite in a debate in which both parties play their political future and is difficult to anticipate how you can get out of this impasse without one of them is seriously injured.

Republicans, especially in the House of Representatives, where it hides the bulk of the Tea Party, refuse to allow a new government borrowing, essential to take payments from day 2 - without a commitment to cut the deficit. Democrats accept this exchange, but want to reduce the deficit with a combination of less spending and more tax revenue.

Republicans, who publicly vowed not to allow tax increases, fiercely resist them. And there, in this struggle between taxes or no taxes, is escaping jets prestige and authority of the United States. This is not a rhetorical question. The fallout of yesterday to reach an agreement before the opening of the stock is a symptom of the fear that markets and begin to punish the economy.

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