When will US stop acting like a fat spoiled brat?

October 17, 2013

By Rob Cox

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Imagine future historians looking back at the 113th Congress of the United States. They will not judge it kindly. One day when the dollar is no longer the currency of choice for financial transactions around the world, the fictional chroniclers will ask, perhaps as Romans did in the fifth century: how did a nation that had so much going for it manage to squander everything?

The debt ceiling deal of Oct. 16 2013 was when it all began to unravel, the historians will conclude. On this day, Congress temporarily postponed a self-induced battle over whether to pay the creditors of the profligate nation that for decades spent more than it produced. Democrats and Republicans agreed to disagree and end a 16-day shutdown of critical functions of the state, in the hopes they could come to some sort of agreement four months down the road. Naturally, that didn’t happen.

America had every reason to resolve its relatively mild fiscal problems back in 2013. The capacity to consolidate financially, with a tiny sacrifice from old folks here, an oversized military complex there and the foregoing of a Ferrari or two amongst the very rich could have balanced the numbers.

After all, the country was experiencing an historic return to energy self-sufficiency, as new deposits of shale gas and oil were unlocked. Its technological innovation was the envy of the world, and U.S. universities the destination of choice for the global elite. Thanks to a pliant central bank and the perceived safety of Washington’s IOUs, money was cheap and plentiful. Relative to other rich nations, the American people were young, procreating and willing to accept new immigrants into their communities.

It was the perfect recipe for prosperity, the future historians will sigh. And somehow, it all went wrong. Extremists on either side of every debate created a battle royale. Not just budgets and money, but public health and safety, human rights and freedoms, even whether to help the poor and infirm. Compromise emerged as a dirty word. And Oct. 16 will go down as that disappointing turning point.

 

Comments

Rob, you make a key error in your article: “On this day, Congress temporarily postponed a self-induced battle over whether to pay the creditors of the profligate nation that for decades spent more than it produced.”. That statement is significantly incorrect. There was never any intention to not pay US bondholders, under any circumstance. The strategy was to prioritize payments, with US bondholders at the top of the list…a very safe place. In fact, this prioritization would have improved, not harmed, the US sovereign credit rating by making the prioritization law. In most sovereign defaults, what you say is true…third world countries do exactly the opposite…they prioritize domestic spending programs over foreign creditors. The Democrats were dishonestly making this claim to frighten people and vilify Republicans politically in advance of upcoming elections where they could lose the Senate. Just putrid propaganda spilt on low information voters.

Posted by sarkozyrocks | Report as abusive
 

“Extremists on either side of every debate created a battle royale.” What are you talking about? You don’t name the equal and opposite extremists, because you can’t.

Only one of the two parties has extremists. One of the two parties even rails against its own radicals.

The “both sides do it” default position is not a fearless, satisfactory, or truthful form of journalism.

Posted by Nieuchess | Report as abusive
 

Indeed. Unfortunately, this sad prognosis may prove to be not just right but even too optimistic.

Posted by Denouncer | Report as abusive
 

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