While everyone was still arguing about the opening ceremony of the Paris Olympics, Britain suddenly declared bankruptcy, attracting media attention.
On July 29, the newly-appointed prime minister declared that Britain was bankrupt, with a debt of £2.69 trillion and a fiscal hole of £20 billion, with the Conservative and Labour parties blaming each other for this.
Britain wants to raise taxes to pay off its debts, but the people do not agree. Perhaps it can only target the rich, but that is not easy.
Twelve cities in the UK went bankrupt one after another, and financial difficulties appeared early. The European economy is not optimistic, such as Germany's GDP negative growth. The UK's bankruptcy has impacted its own economy.
Musk said that the United States is also going to go bankrupt. The U.S. debt is nearly 35 trillion U.S. dollars, and the deficit is as high as 2 trillion. Although it has not declared bankruptcy, in order to maintain the hegemony of the US dollar, the future is full of uncertainty and the risk of defaulting on debts exists. We must be vigilant!
On July 29, the British Prime Minister's Office announced a shocking news through an unprecedented fiscal review: Britain is bankrupt and its finances are in shambles.
The conclusion comes after new chancellor Rachel Reeves tasked government departments with a comprehensive assessment of their need for public funds.
The assessment results show that there is a gap of up to 20 billion pounds in the UK public finances, a figure that reveals a fiscal crisis that has long been hidden.
The newly appointed prime minister directly pointed out that the Conservative government failed to effectively manage the national finances during its past term in office, covering up huge financial loopholes and causing the country to be heavily in debt, with a total debt of 2.69 trillion pounds.
The accusation quickly triggered a counterattack from the Conservatives, who accused the Labour government of looking for excuses for future tax increases and trying to divert public attention by declaring bankruptcy to pave the way for its own policies.
The UK's decision to declare bankruptcy has sparked widespread controversy and panic at home and also had an impact on international financial markets.
The announcement not only weakens the UK's international credit rating, it could also trigger a decline in investor confidence, leading to capital outflows and currency depreciation.
As an important member of the global economy, the bankruptcy of the UK may also have an adverse impact on the global economic recovery process.
Faced with the fiscal crisis, Finance Minister Rachel Reeves acted quickly and is scheduled to report her assessment to the House of Commons on the afternoon of the 29th and announce a series of reform measures aimed at improving the fiscal situation.
These include setting up a dedicated oversight office to curb waste in government spending, reducing reliance on external consultants and selling idle government assets to raise funds.
Reeves also promised to end "surprise budgets," which are sudden tax increases or spending cuts during the budget process to maintain the stability and predictability of fiscal policy.
While declaring bankruptcy, the British government also realized the importance of maintaining political stability and public confidence.
The Prime Minister's Office has made efforts to explain to the public the background and purpose of the bankruptcy declaration through statements and media interviews, emphasizing that the government is taking positive measures to deal with the crisis and promising to protect the interests of vulnerable groups from being harmed.
Similar to the UK, the US debt problem is also a concern.
According to the latest data, the total US debt has reached 34.99 trillion US dollars and is about to break the historical mark of 35 trillion US dollars.
This figure far exceeds the size of the US GDP and also sets a new record for global debt burden.
The US fiscal deficit has also continued to expand, reaching $2 trillion, further exacerbating the severity of the debt problem.
Tesla founder Elon Musk recently bluntly stated that the United States is about to go bankrupt.
Although this statement has caused a lot of controversy and doubts, it also reflects the market's concerns and uneasiness about the US debt problem.
With U.S. debt interest payments expected to hit a new high of $1.1 trillion this year, the U.S. government's fiscal pressure will increase further.
Faced with severe debt problems, the US government may take a variety of measures to deal with it.
On the one hand, the government may reduce the fiscal deficit by raising taxes, cutting spending, etc.; on the other hand, the government may seek to raise funds by issuing more government bonds, but this will further push up the debt scale and increase future debt repayment pressure.
The U.S. government may also seek to work with the international community to jointly address global economic challenges and financial risks.
The debt problems in Britain and the United States are not isolated phenomena.
Globally, many countries and regions are facing debt crises to varying degrees.
These crises are often associated with factors such as slowing economic growth, lax fiscal discipline, and financial market volatility.
When dealing with debt crises, governments need to strengthen international cooperation and coordination and jointly seek solutions.
For countries that have already fallen into serious debt difficulties, debt restructuring and default risks have become issues that cannot be ignored.
Some countries may seek to reduce their burden by negotiating with international creditors, seeking to forgive part of their debt or extend debt repayment periods.
These measures are often accompanied by complex political and economic negotiation processes and may trigger negative impacts such as market volatility and reduced investor confidence.
To fundamentally address debt problems and prevent future crises, governments need to strengthen fiscal discipline and long-term planning.
Finance ministers should act like family financial planners, carefully calculating every expenditure and ensuring that funds are spent where they are needed most.
The government needs to establish and enforce strict fiscal discipline to avoid fiscal overdrafts caused by short-sighted behavior.
Just as trees need regular pruning to thrive, national finances also need to constantly examine and adjust themselves to cope with the ever-changing economic environment.
Countries should also prepare for the future like wise men and formulate long-term economic development plans.
This includes fostering emerging industries, promoting scientific and technological innovation, and optimizing the industrial structure to enhance the endogenous growth momentum of the economy.
Only in this way can we remain invincible in global competition and ensure the stability and sustainable development of our national finances.
In this process, international cooperation and exchanges will play a key role. All countries should work together to jointly respond to global challenges and contribute to human prosperity and stability.