US lawmakers to vote on debt crisis deal

US lawmakers are gearing up to vote later on Monday on an emergency deal to raise the country's debt ceiling and avoid a potentially devastating default.

US stock futures are jumping after President Barack Obama and Congressional leaders agreed to raise the country’s debt ceiling on Sunday.

Even before the markets opened, Dow futures were already up 1.4 per cent. Major stock indexes in Asia and Europe are also reported to have jumped considerably, AP news agency reports.

The debt agreement, which is expected to pass the Senate on Monday, will lead to at least US$ 2.4 trillion of cuts in federal spending over a period of 10 years, allowing American borrowing continue. 

According to financial journalist Anthony Wile, the raising of the debt ceiling alone is not going to solve America’s systemic financial problems. Instead, more realistic policies need to be adopted.

“The entitlements need to be slashed, and military spending overseas has got to stop,” he said. “America has to rein it in and people have to get down to reality and realize that unless they do, the whole thing is just going to be a one great debt balloon which is going to explode over America, creating the worst financial hurricane that the world has ever seen.”