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Economist: US debt crisis not over

08-03-2011 13:12 BJT

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The US debt deal has brought a measure of relief. But some economists say the crisis is not over. Despite weeks of debate, the vote wasn't even close. The bill passed the Senate 74 to 26.

In Beijing, professor of American economic studies Xiao Lian said the passage of the bill only temporarily ends the current default panic. The debt crisis still remains, and if the US continues to issue new bonds to pay off old ones, it is putting other economies at risk.

Xiao Lian said, "For all countries holding US treasury bonds, they will suffer from the depreciation of the dollar, especially Asian countries like China and Japan. In the coming 10 years, the US debt will continue to increase. This should be seen as the real threat."

Xiao also said other economies should consider reforming the dollar-dominating monetary system. He said, "Can the dollar still be an international reserve currency? All countries should put a question mark on that. Regarding the future international economic system, both developing and developed countries should discuss and debate on a new trading currency, or a governing mechanism."

The US debt crisis appears to be over, but the world economy still has things to worry about. As economists warn of the possibility of a new economic downturn in the US, the crisis may not be over. The future health of the world economy will depend heavily on how the emerging economies and the developed countries come up with a new monetary system or governing measures.

 

Editor:Zhang Dan |Source: CNTV.CN

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