David Sacks Sees Biden Playing 'Game Of Chicken' In Debt Ceiling Dispute — Elon Musk Throws In A Meme

Tech entrepreneur and former PayPal executive David Sacks weighed in on the ramification of a potential stalemate in the debt ceiling debate — a looming risk that has set almost everyone talking.

President Joe Biden’s reluctance to endorse the debt ceiling increase the House Republicans have proposed has rendered the issue murkier.

What Happened:  For the debt ceiling to be raised, Biden has to agree to the 1% annual growth cap, claw back unspent COVID-19 aid, and halt his student debt relief plan, Sacks said.

"Some of these controls on spending would be sensible but Biden won't negotiate," he said. "We're headed for a game of chicken as the American economy drives off the cliff," he added.

The "game of chicken" is a model of conflict for two players in game theory. The principle behind the game is that while the ideal outcome is for a player to give in, he attempts to avoid it out of pride for not wanting to look like a chicken.

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Sacks' friend and Tesla CEO Elon Musk responded with a meme of a chicken perched on an axe driven into a tree stump. The text accompanying the meme said "Peace was never an option.

Why It's Important: The Biden administration opposes the “Default on America Act,” which it says will cut veterans’ healthcare, harm public safety, and raise costs for families, according to a White House statement. 

Enacting the bill could lead to a recession and the loss of 780,000 jobs by the end of 2024, according to economists. 

The statement contrasts the bill with Biden’s budget, which seeks to invest in America, lower costs for families, strengthen Medicare and Social Security and reduce the deficit by $3 trillion over 10 years.

Republicans are pushing for tax cuts that benefit the wealthy and big corporations, the statement adds. Treasury Secretary Janet Yellen warned that the government would default on its obligations by early June if Congress does not increase or suspend the debt limit.

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