The US Federal Reserve building is pictured in Washington. Photo/Agencies

After talks in the White House to raise the debt ceiling failed on Tuesday, there are growing worries that if the stalemate continues, the United States will default on its debt for the first time in history, triggering a full-blown financial crisis.

After the failed talks, US President Joe Biden announced that he will curtail his Asia trip, returning from the G7 summit in Japan while skipping visits to Australia and Papua New Guinea. Earlier, the US had said it attaches great importance to Pacific island countries. But for Biden, what matters most at this hour is to raise the debt ceiling. According to US Treasury Secretary Janet Yellen, they will run out of money by June 1 and the US will default on its debt, triggering a worldwide financial tsunami.

While intense negotiations are on, both parties refuse to budge. Biden said Congress should raise the debt ceiling without conditions, because much of the current debt was incurred by previous administrations. But Republicans like House Speaker Kevin McCarthy remain adamant that raising the debt ceiling should happen synonymously with government spending cuts. Behind the bitter quarrels are political calculations. The ruling Democratic Party wants to continue lavish spending to maintain economic prosperity, but the Republican Party worries about the colossal debt that it will inherit should it win the next presidential election. With the US debt already hitting $31.4 trillion by 2022, many believe it cannot be raised indefinitely.

According to experts, if there is a default, the US stock market is bound to crash, possibly losing as much as 45 percent, and the US economy will plunge into recession, triggering a global financial crisis.

More than 140 chief executive officers of major companies, including Pfizer, Goldman Sachs and Morgan Stanley, have expectedly issued a co-signed letter urging Biden and McCarthy to reach an agreement.

The US domestic debt problem matters not just for its own economic future, but also for global financial stability. Richard Nixon’s treasury secretary once said the dollar “is our currency, but your problem”. No wonder more and more countries are trying to de-dollarize.

The US’ current debt crisis fully reveals its political defects. As the world’s sole superpower, the US should act responsibly and avoid domestic problems spilling over to become an international financial crisis.