With a debt crisis looming, US President Barack Obama has made a direct appeal to the American people to put pressure on his political opponents, the Republicans, to agree to a deal that would prevent the US government losing its ability to borrow and being unable to pay its bills from next Tuesday.
Obama said “There are plenty of ways out of this mess.”
In a short address delivered from the Oval Office the president said: “We need to reach a compromise by Tuesday so our country will have the ability to pay its bills on time, as we always have. Bills that include monthly social security checks[old age pensions], veterans benefits [for ex-military personnel] and the government contracts we have signed with thousands of businesses. So please to all the American people keep it up, if you want to see a bi-partisan compromise, a bill that could pass both houses of Congress and that I can sign [into law] let your members of Congress know, make a phone call, send an email, tweet, keep the pressure on Washington.”
Opinion polls show more Americans blame the Republicans that blame Obama for the debt crisis, with a majority favouring some spending cuts and some tax increases. The problem for the Republican leadership is that the right-wing of their party will not accept tax hikes.
Unless there is an agreement on raising the debt limit the world’s biggest economy will be thrown into crisis.
The US will risk losing its AAA rating making it much more difficult and expensive to borrow the money it needs to cover its outgoings and could well default on its debts which would have massive economic consequences around the world.
Analysts say there is a lot of politics being played on both sides with Obama using the bully pupil of the presidency hoping to get the Republicans to back down.
Fears about the health of America’s economy multiplied on Friday after the latest government report showed weaker-than-expected growth in the second quarter, raising the risk of recession.
The US economy expanded by 1.3 percent compared with the same period last year as consumer spending barely rose.
Growth in the first three months of 2011 was also revised downwards.