US GOVERNMENT CRISIS HAS GLOBAL CONSEQUENCES

white house shut down

Only in America could this conversation have taken place!

A male immigrant was upset that his ex-wife and her new husband were allowing his kindergarten children to handle guns.  At the same time, he was frustrated that she would not allow him to take the children out of the country on vacation.

So he consulted a lawyer.

The lawyer couldn’t understand the problem.  To him, letting young children learn about guns was perfectly normal but taking children out of the country was very risky.

Most Americans have not traveled.  Some won’t even go to Canada.  Two thirds of congressmen don’t even have a passport.

So it’s not surprising that they do not take the rest of the world into account when making decisions.

Some years ago, Congress voted to change the dates when the clocks are put back and forward.  There was no realization that this might impact other countries (airline schedules, stock markets opening and closing to coincide with Wall Street, international phone calls, etc.).  It caused chaos around the world until other countries could make the necessary adjustments.

We see the same problem again but in a different way.

The government shutdown in Washington DC and the failure to agree on a new debt ceiling threaten the global economy.  It’s not just an inconvenience for those wanting to visit national parks and monuments.  The global economy is at risk.

Does anybody in Congress care?  Rather, the question is, does anybody in Congress understand?  I’m not sure they do.  Like the lawyer who was aghast that anybody would take a child to another country, they are ignorant of the rest of the world.  They haven’t a clue that their indecision threatens the world’s financial system.

Writing in the Los Angeles Times, October 14th, Jim Puzzanghera wrote from Washington:  “Five years after the U.S. financial crisis helped cause a deep global recession, foreign leaders are worried that history is going to repeat itself.

“The fiscal impasse that has partially shut the federal government now threatens to trigger a U.S. default that would roil financial markets worldwide, leading an agitated China to suggest replacing the dollar as the international reserve currency.

“As U.S. politicians of both political parties are still shuffling back and forth between the White House and the Capitol Hill without striking a viable deal to bring normality to the body politic they brag about, it is perhaps a good time for the befuddled world to start considering building a de-Americanized world,” China’s official state-run news agency, Xinhua, said in an English-language commentary Sunday.”    (“China calls for dollar to be replaced as global reserve currency”.)

The London Daily Telegraph’s Jeremy Warner, wrote on October 14th that:  “The US is recklessly throwing away its future.”  (Article:  “The Sun is setting on dollar supremacy, and, with it, American power.”)  A default would trigger off a financial cataclysm.  That America’s financial pre-eminence  “…could so casually be put at risk by politicians on Capitol Hill is an extraordinary spectacle that may be indicative of a great power already seriously on the wane.”

Explaining America’s global role in the world economy, Warner continues:  “US Treasuries are the very backbone of the global financial system.  They are the supposed “risk-free asset” against which everything else is benchmarked and as such are the collateral of choice in a huge array of financial market transactions.  The dollar is also the currency used to price most commodities, from oil to gold.”

In similar vein, the BBC’s Chief Washington Correspondent Mark Mardell posted the following to the BBC’s website this morning, October 15th.  His chosen title was:  “US shut-down:  A dangerous cliffhanger.”

He compares watching the crisis in Washington to being addicted to a dreadful soap opera.

“You know it has few redeeming merits beyond the entertainment value of witnessing humanity at its worst.  The characters fling themselves from one gratuitous hysterical crisis to the next, barely pausing to reflect on the folly of their ways.  No remorse is one of the rules.”

Note his final comments:  “The world scratches its head in bewilderment.  But it has consequences that go beyond the United States.  Lurching from crisis imperils the world’s economy on an annual basis.

“That’s bad enough.  But it gives democracy itself a bad name, making it look like a system that is not fit for purpose in a modern world.  That is truly dangerous.”

A week or so ago, his colleague at BBC World News America, Lyse Doucet, asked an American expert on the constitution to explain the gridlock in Washington.  He began by saying that the framers of the constitution had intended the US to have an “inefficient” system of government.  Ms. Doucet immediately interjected:  “Well, they’ve succeeded, haven’t they?”

This crisis does not make America look good.  Unresolved, it could cause a collapse of the international financial system and end up costing America its leadership role in the world.

Sadly, a resolution will only be a delay – there is talk of putting something together to last three months, until January 15th.   Then, we will have to sit through yet another long, drawn out episode of the world’s most awful soap opera!

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4 thoughts on “US GOVERNMENT CRISIS HAS GLOBAL CONSEQUENCES”

  1. Repeated short-term “solutions” from Congress to forestall disaster has a numbing effect on the populace. We should see them as warnings, but we don’t.

  2. As we see it from afar– The Republicans/Tea Party folks have a good point about the national debt being a big problem that the nation must face up to, sooner rather than later. But the way they’ve gone about it seems strategically very poorly thought out, ineffective and reckless. It appears to be motivated more by political wrangling than by a desire to tackle the debt problem with fiscal finesse.

    The debt problem has grown for long enough to look very difficult to bring under control. A solution at this stage would surely require an extraordinary level of cooperation between Democrats and Republicans, and an extraordinary level of common support from the populace, something which is extremely unlikely given the nature of democracy plus human nature. So isn’t it inevitable that political bickering and short-term patch ups will continue, with the decline of the nation.

  3. There’s no doubt that Americans, as evidenced by how weak media coverage of international affairs is compared to that devoted to various celebrities, tend towards a lot of navel gazing. The lack of knowledge of foreign languages is yet more evidence. However, there’s a key reason why Americans historically and even today more than a decade after 9-11, still often don’t have passports. For a long time, they could travel to Mexico and Canada without them. That has only recently changed. Furthermore, Americans have a key advantage over northern Europeans as tourists: They can stay within their country, yet still lay on warm beaches in winter time, such as in Florida. But an Englishman or German needs to go to Spain or the Riviera to do that, i.e., go into another country. Another factor is the sheer size of the country. As the world’s third or fourth largest country (depending on how inland water areas are counted compared to China’s), there’s a lot territory that needs to be driven or flown across before another border is crossed compared to even Europe’s major powers. Finally, when visiting the Isle of Wight for the Feast in 2001, I remember hearing that some people on that island had never even been to England/Britain proper, but had spent their whole lives on that island off its coast. It would be interesting to check how well traveled many average Europeans are compared to many Americans on a statistical basis.

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