America’s credit reassurance

The credit agency’s downgrading is perplexing the United States. Perhaps, this is why Washington has opted for a damage control strategy with its allies and business compatriots.

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Published: Mon 22 Aug 2011, 9:19 PM

Last updated: Mon 6 Apr 2015, 6:48 PM

US Vice-President Joe Biden’s visit to China and the reassurance that he doled out to its largest investor and stakeholder that Washington would not default, in any eventuality, is smart diplomacy. This should have definitely relieved the Chinese leadership of some pressure as the state media had castigated the US leaders for acting recklessly during a political impasse between the White House and the GOP over allowing the country’s debt ceiling to rise.

Cultivating Beijing is of utmost importance for the United States, as it remains its single largest foreign holder of debt. Biden’s upbeat remarks to the Chinese business audience that the US is still undoubtedly the best bet for investment and trading is not merely as political statement, and should be read in the context of measures that the Obama administration is undertaking to rewrite a new plan of action in foreign trade and commerce. The forthcoming policy statement from President Barack Obama in which he is likely to recast his domestic and international priorities will be closely awaited by the world at large and should come as a bonanza activity on the global economic stage, which is reeling under the debris of debt, inflation and a conspicuously inward looking pessimism.

Washington has no other recourse but to stick to its stimulus and spending strategy, and at the same time buoy world growth engines to invest and reform the existing financial decorum. The global economy is in need of liquidity and that can only come when proper sharing of resources and human potential is agreed upon at the highest level. International lenders and corporate sectors have to rewrite a new equation of interaction, and ensure that the recessionary trend come to an early end.

The onus primarily is on the US authorities as to whatever upheavals are there in the financial world are all owing to the greed on the Wall Street and an outcome of the arrogant policies of a few hefty bankers who believed in having personal deep pockets. Washington, as its sails out of the domestic debt and budget-making crisis, has to pay acute attention for reforming the world economy, and should not sit as a spectator any more. Biden’s words are, indeed, real leadership.

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