but this is a necessary step to try and address this tragedy. but many like gloria say they heard it all before. he, sienna, more jesse, florida. we want to believe that this government will do things differently. no, honey, say it wants to pace, but be able to construct it because one thing is desiring peace, another is making it happen. the caravan will turn your findings into a report. the will present to peace negotiators in february in mexico, who will den, devise a plan to implement immediately hopefully bringing some relief to those who for too long of only known abandonment and neglect. allison the alger sierra along the sun quan river. ah, you're watching al jazeera, these are the headlines this ella. is rally forces have that withdrawn from the janine refugee camp in the occupied west bank after

a battle broke out when they right of the area. health ministry says at least 9 palestinians, a dead from the occupied at west bank. i'm at maha has moved it is part of an intern spike campaign by these 8 courses against what the whole militant opinion sections and the a refugee camp in jeanine deckles. this is going on, and despite the fact that opinion apology, it picnic re governing janine other towns and they are quite with bank. but the policy is upset. i'm frustrated, but this is going on, day and night at lunch, coke. caves masses 15 russian missiles have been shot down in a series of attacks across few crane. at least one person has been killed and to injured. the judge investigating the 2020 by role by root poor explosion has been summoned by lebanon's top prosecutor, judge,

direct beach has been charged with miss handling the inquiry of lives, but refuses to step down. on wednesday, the prosecutor also ordered the release of all those to change in the case rallies, being held in several cities across estrella, calling for a change in the way it's national days of served mr. eli day can memorize the arrival of the 1st british settlers and the 18th century, but indigenous group said as a day of morning, an extreme cold snap is sweeping parts of asia. japan has been badly effected recording some of its coldest temperatures in a decade. heavy snowfall and strong winds have disrupted traffic and grounded hundreds of slime. north career has imposed 5 fe lockdown in the capital pyongyang to contain a rising number of cases of we're spirit treat illness. people have been asked to check their temperatures 4 times a day and report the results. and at least one person has been killed and several attacked in on an attack rather on 2 churches in southern spain. a man armed with

a machete went on a stabbing rampage. it's being treated as a possible act of terrorism. all right, those are the headlines. i'm emily. angry in the news continue here on al jazeera. after inside story talk to al jazeera, we also do believe that women of afghanistan was somehow abandoned by the international community. we listen, we are paying huge price for the war against terrorism. what's going on in some money? we meet with global news makers. i'm talk about the stories that matter on al jazeera . again, the u. s. has hit its debt ceiling that's triggered a baffling congress. the mother can say, spending must be cut to lift the borrowing cat. the president biden insist there should be no preconditions. so what happens next? what effect is all this have on the global economy? this is inside story. ah

and i welcome to the program, i'm laura kyle. the white house has sought to assure americans that congress will find a bypass in solution to avoid a debt default that was off to the country, hit a 31.4 trillion dollar borrowing limit on thursday last week. congress usually votes and agrees to raise that limit as it did the last time in 2021. march the stand off in washington, this time scene significantly rescue. some republicans have declared they won't raise the borrowing ceiling again unless president joe biden agrees to state cuts and federal spending. but democrats on bunching. that's raise fairs of a political showdown that could unsettled markets and hit global growth. also we'll talk about stream republican economic religion over here is

about cutting social security and medicare. and i love are 30 percent sales tax. and we will talk about that, look a well, let's take a closer look at what's next for the u. s. reaching the debt ceiling means the government isn't allowed to borrow any more money unless congress agrees. the federal government could run out of money to pay its bills as soon as june. that would pressure congress to either raise all suspend the federal borrowing limit. if that doesn't happen, some agencies will be forced to shut down or scale back their work. that's happened 3 times in the past 10 years, but even delays come with a cost, the dollar would weaken and borrowing costs rise in the form of higher interest rates for mortgages, credit card debt and other loans. however, america's debt to g d. p. that's the gross domestic product ratio, fits at

a 128 percent, and that's lower than more than a dozen other countries, including japan, greece and italy. ah, of more on this, let's bring in our guests and in california, william lee chief economist at the milken institute in washington, dc. laura blessing senior fellow at the government affairs institute at georgetown university and in sol, june park schmidt futures, asia fellow at the international strategy for a very warm welcome to all of you, william. first of all, tell us how the u. s. managed to a mass as extraordinary amount of debt. $31.00 trillion dollars is more than most of us. can even imagine it's a phenomenal number. and when you think in terms of trillions of dollars, it's really hard to run your head around it. one of the things we have to remember is that governance finance themselves,

either through taxes and or by borrowing. and what has happened is that the huge level of government expenditures, whether it's for welfare programs or for defense or just for government administration, has resulted in larger, larger governments, over time. and b, these larger governments have had to fund themselves, and they've not always raised taxes to balance the budget. and once you have a deficit, there's only one way to finance it and that is through borrowing. and so the u. s. deficits have accumulated over over many, many decades and centuries are going back to the revolutionary days. and so big now have a position where the u. s. is bored, enormous amount of money from its own people. but now about a 3rd of the debt is been bar from the rest of the world. and what steps to you as, apart from the rest of the world borrowing is that the u. s. has reserve currency, in other words, countries are willing to lend to the us if they're paid back in us dollars. and that gives us a special privilege which in some sense has allowed us to run

a much larger deficit and much larger levels of debt outstanding than other countries. okay, june, the whole world is in more debt than ever before. give us an idea is how the u. s. ranks when you look at the situation as a whole? well, because the federal reserve board has been going on with the interest hikes, the rest of the world, coupled with the impacts from the russian invasion of ukraine, is seeing ro arrives in prices generally. and in the case of south korea, the bank of korea keeps on raising interest rates following the federal reserve for the nation of new interest rates. so in general, a lot of countries, especially in the industrialized world, people are grappling with having to pay their bills and having to pay for their loans. and everything that has to do with a borrowing scheme has

a burden on these people and going further because the u. s. is contender, the fed is intended to raise further the interest rate. we're going to see a huge burden on these people around the globe. i think it's generally assume distant at laura the debt is not a good thing, but how much debt is too much that we have crew debt is, is a economic concept. but it's also a political one to and we've created structural deficits from a series of different government policies. i mean, the united states economy has actually been fairly government spending had been roughly about the same percentage of us gdp for, you know, multiple generations at this point. the policy decisions to cut taxes in particular

have caused a lot of structural deficit. but you have spending that have been priorities by both parties has created this current state of affairs. economists certainly have different levels of debt that they find to be concerning. and i think everyone would consider the united states debt right now to certainly be in that category. so william, if the percentage of g of jet debt to g d p in the u. s. hasn't changed that much over the generations. why does the u. s. both are having a debt ceiling. yeah. that the levels of spending a taxation delta g could have been roughly the same. but unfortunately spending has always exceeded the level of revenues and taxes. and so what you find in the case to not states is that you are finding it difficult to finance more and more of this debt because the rest of the world and us citizens in general, are less willing to hold on to the stead because of concerns about not getting paid off. now, as i said earlier, by definition u. s. is able to pay off it's,

that's with you was dollars. and by printing more us dollars, we can always pay off the debt. unfortunately, one consequence of doing that would be higher and higher inflation, which is a consequence that no governance willing to accept. so. so one of the things that we have to consider in managing the levels of us that would be what is sustainable . and at the i m f, where used to work, there are formulas that are used to calculate sustainable levels of debt with low interest rates as they are now, even though they're rising, they're still low enough that the u. s. levels of. busy are more than sustainable, we are able to pay our interest payments are in a fairly easy fashion. and, and so the question really comes down to the point of politics. what government is willing to cut back on expenditures in order to limit the amount of debt that's issued. and right now, the republicans are asking democrats, you've got to cut back on entitlements that is spending that is made made permanent

by, by legislation. and the end the democrats will say no, because our people need these entitlements cut back on something else. cut back on defense, and so the debate in congress is going back and forth about where the cut and that ceiling has been used as a hostage of for these discussions in order to get one site to move on or the other site to move. so laura, we've had the treasury section on it yet yet, and, and implement some extraordinary measures to tie the u. s. over until she says about june. so as william says, the focus now is on congress, isn't it to source out this issue for a longer term, and you've got this not of hard core republicans suddenly in the house of representatives on the one side, and you've got a very stubborn sounding joe biden. leading the democrats on the other. so who's gonna, who's going to give in, what's gonna happen here? an excellent question, and we've seen a, this is it has become a particularly familiar dance, but i think we've become a little bit to in your,

to and, but we've been having kind of partisan fights concerning the debt ceiling where a majority of one party is lining up against the other since 1953. i really want to underscore the bitches. i you know, there's no kind of good era for the debt ceiling. it's also not designed to result in fiscal restraint. if it was actually designed to give the treasury more flexibility when it's originally created in 1917, and we can, we're also perfectly capable of raising it without having any effect on government, taxing or spending. of course, it's being used as a tool to, you know, try to bring people to the table in terms of having some larger part bargain. you know, obama and, and speaker banner banner famously attempted and failed at a grand bargain, a terrain in federal spending. but there is no requirement that you actually do any legislating of around spending and taxing and i want to put taxing on that on the

table to not just spending cuts, you know, because it's a, it's a math problem. you can, you can add and subtract. but you know, we, this is not a circumstance. busy that is particularly fortuitous for, you know, calm and measured, expert policy making. when you engage in this level of gratian ship, and in fact, it's never been use successfully as a tool for fiscal restraint. and in the meantime, june the rest of the world watches and holds that breath. i mean, what about the country? think of the u. s. when it watches the brinkman ship play out in the 11th hour. so i'm regarding the treasury bonds that are issued in order to secure government expenditure and budgets. many of the foreign countries that hold us treasury bills, they've been scaling back,

especially japan and china in the past months has been happening, scaling back the amount of their t p build purchases. and it also has to do with the fact that the fed has been increasing its interest rate because the overall impact that the u. s. economy has on 2 other countries is very much correlated, associated with the amounts of the liabilities of the u. s. has on to these countries and it could be the case that into the coming months, they could scale back even further. and we won't know until june how, how the, how the congress would react in response to that ceiling. but chances are there would be very, very harsh criticisms from china regarding the discipline. a william of japan, china, they hold most of the us treasury bonds. don't they generally seen across the world

as robust as you mentioned earlier. but that's not so much the case now. what impact does that have? well, let's, let's remember why it is that other countries whole u. s. treasury's and you are set securities in general. it's because they've been running a current account, treat surpluses with united states. in other words, they've exported more to us than that they've important from us. and this imbalance is resulted in accepting u. s. dollars as payment for their exports. and in order to invest these dollars to earn some interest, they have what u. s. charges because of all financial assets that are denominated us dollars is the most safe, is the most secure because of the u. s. credit worthiness. the belief that the u. s . will always pay it's debt obligations, whether this interest payments or, or rolling over the debt or but the debt ceiling put that in question. and i think one of the things to remember also is that the us treasury security is the foundation of pricing for all of the securities in the world. so. so the consequences for the rest of the world goes beyond the amount of debt that's held

by japan. or, or u, k, or, or, or china, it really is the, at the basis of all financial instrument pricing. in other words, everything that's issued, whether it's in, by emerging market countries or, or by, by the, the euro area. every security is priced based upon the price. that's a credit worthiness of us treasury so. so that's very important thing to keep in mind is that, that the jet, that discussions about the possibility of not paying us interest, or is something that will shape the global financial markets to. it's very core because is very core is based upon pricing of us treasury's and so, so that is the, the, the ramifications that share a secretary yellen. and every federal reserve chairman wants to avoid, which is the shape the financial system of the global economy. nearly all and june, nearly all the financial assets on the planet. they're priced in relation, not they to us treasury bonds. so if the u. s. does defaults what would happen,

the entire financial world becomes riskier. well, as we have been in the case of the 2011, that feeling crisis, i think there is a possibility for a last minute cap increase. or there could be some other avenues or policy action by the us government that we don't know yet it's. it's not something that we can anticipate at this moment because it will be played out until june. but let us look ahead, hypothetically say that that doesn't happen. that soothing does not increase. would you, do you agree with that? lord, you agree that that scenario simply cannot exist. it would be catastrophic. it would be absolutely economically catastrophic to the united states as well as the rest of the world. and historically, what has happened is the threat of that catastrophe has prompted action the even if

l. b a last minute action in episode such as 2011 where, you know, what had previously been a, a, you know, partisan but not perilous pattern of raising the debt ceiling. busy you know, all of a sudden i became genuinely dangerous. you know, historically the pattern is. busy these folks play with fire, but come together at the last minute and we are shaping up to have potentially our most dangerous episode yet. just given the coordination challenges in congress, we have a lot of coordination. difficulties in the house of representatives which the world has seen. busy play out with the speakership, vote or vote. rather i would say. 4 but, and, you know, while the houses the more worrisome chamber i, you know, it's also going to be difficult in the senate. you know, they've got 51 senators. you know, unless you attached to

a reconciliation package with, which will happen. this is something that you're going to need 60 senators to vote for, you know, in december of 2021 they had, this is perfectly highly unusual episode where they had a filibuster curve out. so they, you know, created mechanism by which they could raise the debt ceiling without having a single republican senator go for it. so the house will be particularly difficult, but the senate is not going to be a cakewalk either. we should, we should genuinely be concerned. even though historically this has been raised, but i, you know, in the world and you know that the press is right to be paying a lot of attention to this. and this is an important issue to educate people. but the thing that i strongly get my head around william is that it doesn't have to be this way. it could quite simply not have a dead ceiling. i mean, just use, i could janet let yelena said that she would support getting rid of that ceiling. but present biden has said he is against it. can you explain to us why people want to keep it? let's remember it. when you asked the question,

what would have happened if the u. s. did not raise the debt ceiling? well, it happened in 2011 and, and what happened was, stop markets crashed around the world. are all asset prices as a value of these financial assets started to crash because the, the basis of his pricing on us treasury's was put in doubt. so that's the financial disaster that the world wants for void. the u. s. had a triple, a rating status on its securities and it became double a by, by standard and poors. so the u. s. really paid a huge price for that kind of recalcitrance in not raising the debt ceiling. now, why is it that every politician wants to keep that around? why don't we just raise the dest ceiling to be 5 times the level of that, that we have now, to give it more room the way they do in 10, martin all or but, but the reason why is because every minority party and democrats, republicans together, both realized they will be the minority at some point,

it gives the minority party united states leverage to get it's a political agenda across and pass legislation on. unfortunately, it puts the rest of the world at hostage to these domestic political battles. and so the political science of the debt ceiling is really what drives the discussion and the dynamics. no party will ever get rid of the u. s. that silly because it knows that if it's ever in the minority, it can hold up everything and sort of put pressure on the majority of it to get some of its political agenda pass so, so that history is something that has played the u. s. that silly, whereas you have other that seal is an in say the euro area. 60 percent of g d. p was the mandate from maastricht. the maastricht treaty that put together the euro area and allow the year to be the common currency for all these european countries . well, that 60 percent desolate has consequences because the euro itself is based on

having no more debt than 60 percent. so when italy and greece starts to exceed these limits on other countries pulled together and force discipline on to italy, or greece or whatever country is exceeding it's share of that, that ceiling united states. there is no such limit to that. that is placed on congress. it's the 2 parties debating and because there is no forceful limit that can be placed on u. s. congress. no political party will ever allow that, that silly discussion to go away. laura, do you agree with that? do you agree that this perennial boss has. busy had to say, i agree that i cannot, hey, circumstance in the near future where let's be frank, the democratic party would have devote to abolish the debt ceiling. and i, and while you have had certainly both parties, i using it as a partisan tool to i show that they would prefer to do spending a different way or do fiscal politics a different way. um, you know,

from the other party i, you know, i, the, in do you have had serious voices, including of major party leaders in a democratic party recently be in favor of abolishing it or at least performing it in a major way. so i testified to, to congress last february and you had a number of different bills that were had, you know, been put forward to either abolish it were to, you know, kind of blunted as a, as a dangerous tool. so, you know, while it has been used by both parties over time, you know, i wouldn't describe it as being kind of attend to the filibuster is something that you always want when you're, you know, in the, in the minority or when you're trying to point out that you have a difference of opinion from whoever's in charge. and you know, i do think that there was a missed opportunity for barton last fall to use the bully pulpit of the presidency

. i to push harder for a potential abolition of the debt ceiling or at least some level of reforming. i mean, let's be clear. there are a lot of different ways that we could reform this to be less dangerous than it is right now. i would personally fail personally fav favorite secretary yell and does, which is to get rid of it entirely. but we could, there are, there are lots of different ways of blunting it to be fair to biden sen, mansion. i'm not sure that the votes in the senate were there, but if ever there were an issue to kind of more strikingly campaign on and try and try to push for i this is would have been you know, this would have been an issue. i would have gone to pronounce for last fall when they had more democratic boats to make the attempt. i could see william, it's still very adamant that there will never ever be a change to this debt ceiling. but i just want to bring jude and last day because i don't foresee, i don't foresee them having the votes, right?

anytime june, the u. s. is not an island, it may be the safe part of the well, but it certainly is influenced by the rest of the world. is there no pressure that can come from outside the us to force a change to force some reform given, but it actually does hold the rest of the global financial system to hostage yes, the u. s. does not come to a causal conclusion in resolving this question, i think the consequences could be quite disastrous, especially for the countries that are holding and the us treasury bills. chances are, it's not going to be the case that the treasury bonds are secure for investors. and that might impact countries, decisions to keep on buying and the willingness to buy is the key issue here. because previously there, there has been assured kind of insurance by buying the treasury bills for these

countries. but the scaling back efforts by china and japan and reset ones gives me the sense that depending on the geopolitical situation or geopolitical risk per say, there are chances that countries would not be willing to hold them if they do not desire them. and that would be a very, very consequential situation for the united states. okay, well we're gonna have to leave. there has been a great discussion on that. some key data will definitely be watching out for in the coming months in this on going debacle. i think we should call it in the u. s. william lea, laura blessing and jude park. thank you very much for joining us. and thank you to for watching, you can see the program again any time by visiting our website. that's al jazeera dot com, and for further discussion, do go to our facebook page. that's facebook dot com forward slash ha inside story. you can also during the conversation on twitter handle is at ha,

inside story from me laura kyle, i'm the whole team here. it's bye for now. i'm ah ah, al jazeera, when ever you oh, the american people have spoken. but what exactly did they say?

is the world looking for a whole new order with less america in it? is the woke agenda on the decline in america. how much is social media companies know about you? and how easy is it to manipulate the quizzical look us politics, the bottom line. but it hasn't been done before. can be done even better, as long as a human being is doing it, you can do it. no matter how you possibly it looks it's you to put in the effort to put in the lock and you also have to be patient to be a. so i am the captain i sales than me. i so continued kenya. and im also at the assistant which we are on the ice okey team in east in central africa. b as they i francois progressing pretty well. we had managed to play in some international games. then when coffee came, the ice rink was closed. and it's the only i think in the country african stories from african perspective wishing those upon me no ma

mancha. now when i did picky to 0, with short documentary from african film, maybe from wanda and bertina fossil superintendent to meet with sounds of home one and the coach in africa direct on al jazeera under cover reporting. but it works with exclusive stories. explosive results, al jazeera investigations, ah, a robot this and, and do how the top stories and all jersey is ready for says have withdrawn from the janine refugee camp and the occupied wire. spank after a battle ball.