US heading for abyss despite 'cliff' deal: Xinhua

BEIJING: China's official news agency warned the United States on Wednesday it was heading towards an "abyss you can never come out of" even though Congress backed a deal to avert the "fiscal cliff".
After the House of Representatives approved a bill which avoids tax rises for most Americans and delays automatic spending cuts, a commentary by Xinhua pointed to bigger fiscal challenges ahead for US lawmakers.
"As the world's sole superpower, the United States is clearly not Greece," Xinhua said. "But economics and commonsense do not lie. "People, or governments, can overspend for sometime, but they simply cannot live on borrowed prosperity forever."
China, which has the world's biggest foreign exchange reserves, is a major buyer of US Treasury debt. The state-run news agency identified the US public debt of nearly $16.4 trillion -- more than 100 percent of its gross domestic product -- as Washington's key challenge, calling it a "fiscal abyss" that made Europe's sovereign debt crisis seem a "mere hiccup".
"The most worrying thing about US politicians is that if they have come so close to falling off a 'cliff', they are far less likely to reach a deal to help their country climb out of an abyss," the commentary said.
"In a democracy like the United States, tax increases and spending cuts, the exact dose of medicine needed to cure its chronic debt disease, have long proved hugely unpopular among voters. So the politicians have chosen to kick the can down the road again and again.
"But as we all know, the can will never disappear," the commentary added. "Sometime and somewhere, you might trip over it and fall hard on the ground, or in the US case, into an abyss you can never come out of."

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