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US debt talks collapse

The US is on the brink of a major economic crisis after negotiations between Barack Obama and Republican Congressional leaders over the national debt dramatically broke down on Friday.

world Updated: Jul 24, 2011 00:57 IST

The US is on the brink of a major economic crisis after negotiations between Barack Obama and Republican Congressional leaders over the national debt dramatically broke down on Friday.

Obama, showing anger, passion and verbosity rare in public in his two-and-a-half years as president, called a press conference at the White House at short notice to express his frustration with the Republicans.

He told reporters there had been “a breakdown in trust” between the White House and the Republican leadership. In a snub to the president, the Republican leader in the House, John Boehner, failed to return calls from the White House throughout the day. Boehner finally called the president on Friday evening to inform him the Republicans were walking away from weeks of negotiation aimed at resolving the country’s debt crisis.

The collapse in talks comes with 10 days left until the US, for the first time in its history, faces the prospect of defaulting. If it fails to raise its $14.3 trillion borrowing ceiling, there will be serious consequences for not only the US economy but other countries around the world.