deal would have to be bipartisan and there is huge pressure from the left and right in both parties do not cave into each other or, in some cases, do not cut a deal at all. nomia iqbal. we can now speak to kenneth judd, who is a seniorfellow at the hoover institution. he specialises in macroeconomics, public finance, and computational economics. thank you forjoining us here on bbc news. first off, what would happen in the united states if a default were to take place? states if a default were to take lace? ~ . , take place? well, technically, a default is take place? well, technically, a default is when take place? well, technically, a default is when you - take place? well, technically, a default is when you don t i take place? well, technically, | a default is when you don t pay your interest payments on the debt. 0r your interest payments on the debt. or you don t make a payment on something that you own. now, but the technical definition. owe. what would happen beyond that
well where do you want to cut. and therein is the impasse. the president says he will not cut social security payments or defence. the republicans refuse to further increase taxes. we are not even close to a compromise.here is the speaker earlier this week at the ny stock exchange. without exaggeration, american debt is a ticking time bomb that will detonate unless we take serious responsible action. yet, how has president biden reacted to this issue? he has done nothing. so, in my view, i think in the rest of america, it s irresponsible. rather than face the facts, this president has embraced a fantasy, that debt doesn t matter, that money can always be created out of thin air. and that the solution to higher prices caused by reckless spending isjust higher taxes. and this is how the senate majority leader chuck schumer reacted. democrats want to avoid defaulting
address this issue in this speech. without exaggeration, american debt is a ticking time bomb that will detonation unless we take serious responsible action yet, how is president biden reacted to this issue? he has done nothing. reporter: now, chris, i was just over in a press conference with chuck schumer, the democratic leader, the democratic controlled senate who would agree with the second part of that, it s time to do some action here. they re not satisfied with what they have seen from mccarthy with both chambers coming back into session after a few weeks off, there s a new sense of urgency starting to address this issue hopefully before we get too close to the deadline. garrett headache,aake, thank that the white house responded arguing that it s mccarthy holding the u.s. economy hostage. i want to bring in nbc s allie
crisis, good relations with kline helped washington avert another great depression. you see china held mass amount afters of american debt as well as american housing bonds issued by fannie mae and freddie mac. had beijing sold those, this could have created a downward spiral for the economic and fallout around the world. but washington persuaded beijing not to swell and china uses its own miss cal and monetary strength to boost the economy. it is sobering to think the next global crisis, will likely see none of that policy coordination between the world s two largest economies. the geopolitical tensions are likely to grow fast. this week also brought news that it was actually more significant than a wandering balloon. the u.s. strategic command which oversees the u.s. nuclear arm,