The United States needs a "grand bargain" on deficit reduction if it wishes to retain its diplomatic and military influence, a former cabinet member of two presidential administrations has warned.
The warning comes as time runs out for the US to avert spending cuts of US$85 billion (Dh312.2bn) due to kick in today.
Although America has recovered from the financial crisis, persistent fiscal deficits were a severe challenge facing the world's biggest economy, said James Baker, who served as the Treasury secretary to Ronald Reagan and as secretary of state to George HW Bush.
"We may have put the Great Recession behind us but we're far from achieving robust growth," he said at the NBAD Global Financial Markets Forum yesterday in Abu Dhabi.
"We are, in fact, broke," he added, saying that without the dollar's status as a reserve currency the US would likely have already faced a debt crisis.
The current calm on financial markets was not to be taken for granted, Mr Baker added.
"What's happened in Europe over the last several years is a cautionary tale," he said. "Debt crises can come on you with frightening speed … Right now we're enjoying extremely low rates and manageable debt servicing. When rates begin to rise our debt problem will darken considerably."
The US has faced a series of escalating congressional battles over its $16.6 trillion debt burden, which rose sharply as a result of tax cuts passed by the George W Bush administration and the cost of bailing out large chunks of the American financial services industry.
The country's indebtedness was equivalent to the size of the entire US economy in 2011, according to the Bank for International Settlements.
The White House and congress are attempting to reach a deal to avert the so-called "sequester", a package of $85bn in automatic spending cuts that are due to take effect today.
The austerity measures are a leftover of the debt ceiling battle of summer 2011, intended to force a compromise by politicians by being so unpalatable to both parties that they would be forced to work together to forge a deal on deficit reduction.
With the deadline to reach a deal only days away, the senate confirmed president Barack Obama's appointed Treasury secretary, Jacob Lew, late on Wednesday.
ghunter@thenational.ae
Company%20Profile
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SPEC SHEET
Display: 6.8" edge quad-HD dynamic Amoled 2X, Infinity-O, 3088 x 1440, 500ppi, HDR10 , 120Hz
Processor: 4nm Snapdragon 8 Gen 1/Exynos 2200, 8-core
Memory: 8/12GB RAM
Storage: 128/256/512GB/1TB
Platform: Android 12
Main camera: quad 12MP ultra-wide f/2.2, 108MP wide f/1.8, 10MP telephoto f/4.9, 10MP telephoto 2.4; Space Zoom up to 100x, auto HDR, expert RAW
Video: 8K@24fps, 4K@60fps, full-HD@60fps, HD@30fps, super slo-mo@960fps
Front camera: 40MP f/2.2
Battery: 5000mAh, fast wireless charging 2.0 Wireless PowerShare
Connectivity: 5G, Wi-Fi, Bluetooth 5.2, NFC
I/O: USB-C
SIM: single nano, or nano and SIM, nano and nano, eSIM/nano and nano
Colours: burgundy, green, phantom black, phantom white, graphite, sky blue, red
Price: Dh4,699 for 128GB, Dh5,099 for 256GB, Dh5,499 for 512GB; 1TB unavailable in the UAE
Another way to earn air miles
In addition to the Emirates and Etihad programmes, there is the Air Miles Middle East card, which offers members the ability to choose any airline, has no black-out dates and no restrictions on seat availability. Air Miles is linked up to HSBC credit cards and can also be earned through retail partners such as Spinneys, Sharaf DG and The Toy Store.
An Emirates Dubai-London round-trip ticket costs 180,000 miles on the Air Miles website. But customers earn these ‘miles’ at a much faster rate than airline miles. Adidas offers two air miles per Dh1 spent. Air Miles has partnerships with websites as well, so booking.com and agoda.com offer three miles per Dh1 spent.
“If you use your HSBC credit card when shopping at our partners, you are able to earn Air Miles twice which will mean you can get that flight reward faster and for less spend,” says Paul Lacey, the managing director for Europe, Middle East and India for Aimia, which owns and operates Air Miles Middle East.
The specs
Engine: 2.9-litre twin-turbo V6
Power: 540hp at 6,500rpm
Torque: 600Nm at 2,500rpm
Transmission: Eight-speed auto
Kerb weight: 1580kg
Price: From Dh750k
On sale: via special order
'THE WORST THING YOU CAN EAT'
Trans fat is typically found in fried and baked goods, but you may be consuming more than you think.
Powdered coffee creamer, microwave popcorn and virtually anything processed with a crust is likely to contain it, as this guide from Mayo Clinic outlines:
Baked goods - Most cakes, cookies, pie crusts and crackers contain shortening, which is usually made from partially hydrogenated vegetable oil. Ready-made frosting is another source of trans fat.
Snacks - Potato, corn and tortilla chips often contain trans fat. And while popcorn can be a healthy snack, many types of packaged or microwave popcorn use trans fat to help cook or flavour the popcorn.
Fried food - Foods that require deep frying — french fries, doughnuts and fried chicken — can contain trans fat from the oil used in the cooking process.
Refrigerator dough - Products such as canned biscuits and cinnamon rolls often contain trans fat, as do frozen pizza crusts.
Creamer and margarine - Nondairy coffee creamer and stick margarines also may contain partially hydrogenated vegetable oils.
Joker: Folie a Deux
Starring: Joaquin Phoenix, Lady Gaga, Brendan Gleeson
Director: Todd Phillips
Rating: 2/5
