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Channel Tunnel Chaos Enters Day Two as Power Fault Drags On

The disruption, caused by a fault in the system's overhead power supply, on Tuesday upended plans for thousands of passengers in London, Paris, Brussels and Amsterdam. Rail passengers travelling between the UK and mainland Europe are enduring a second day of major disruption after a power failure shut down the Channel Tunnel, halting both Eurostar and LeShuttle services. The fault, linked to the overhead power supply, brought traffic to a standstill and left thousands of travellers stranded on both sides of the Channel. Although some services have begun to move again, operators warn that delays and cancellations will continue while engineers work to stabilise the system. Eurostar has urged passengers to avoid travelling unless essential, as many trains remain suspended or heavily delayed. LeShuttle customers are also facing long queues, with significant backlogs reported at both Folkestone and Calais. The timing has added to the frustration, hitting one of the busiest travel per...
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Navigating the U.S. Debt Tightrope: Balancing Growth and Sustainability

 

Even if the U.S. avoids worst-case scenarios, its ballooning debt and the cost of servicing it could eventually slow economic growth and make the burden unsustainable. According to a former International Monetary Fund (IMF) official, the U.S. must tread carefully to maintain a delicate balance.

Here are the key points:

  1. Debt Levels: Debt held by the public is already around 100% of GDP, and projections indicate it will climb to 116% in 2034, 139% in 2044, and 166% in 2054. While these levels may seem alarming, Japan’s experience shows that an advanced economy can manage substantial debt when borrowing in its own currency.

  2. Advantages and Risks: The U.S. benefits from dollar dominance, deep financial markets, and Federal Reserve support for Treasuries. However, institutional breakdowns remain a threat. For instance, concerns exist about U.S. debt default under certain scenarios.

  3. Interest Obligations: As the debt ratio rises, meeting interest obligations could force the federal government to cut discretionary spending. This reduction could negatively impact economic growth. The U.S. must balance interest payments and maturing Treasury bonds.

  4. Challenges Ahead: Rising bond yields and the outlook for higher interest rates pose challenges. Treasury Secretary Janet Yellen acknowledges this difficulty in controlling deficits and debt expenses.

  5. Trade-Offs: To sustain debt, the U.S. faces trade-offs. Borrowing more to pay off debt could exacerbate the burden, while cutting spending on critical initiatives might hinder growth.

In summary, the U.S. walks a tightrope between debt sustainability and economic growth. Striking the right balance is crucial for a prosperous future.

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