The political theater in the United States this week has been all about the “debt ceiling”: Congress voting not to increase it; President Barack Obama and the House Republicans meeting to discuss it; and the Treasury warning that failure to raise it will bring economic apocalypse for the United States and the world.
Elites like to accuse ordinary Americans of a lack of political sophistication, but everyone from Main Street to Wall Street is savvy enough to understand that so far, the fighting over the ceiling is pure Kabuki. As with the budget deal earlier this year, the real negotiating is unlikely to happen until the very last minute.
But everyone also understands that this summer game of brinkmanship matters because it is a proxy war being fought over a very real problem: the growing national debt and deficit. At just under 60 percent of gross domestic product, the U.S. national debt is lower than that of France, Germany and Britain. And the rest of the world still seems delighted to lend the United States money on historically generous terms.
The need to tackle the deficit (although not how to do it) has become a national truth universally acknowledged. What nearly all Americans of all political stripes also understand is that the problem with the budget deficit is health care spending – which is why the most important economic initiative of the Obama administration not directly connected to the financial crisis and its aftermath was health care reform, and why the most important new economic policy proposal from the Republicans is Representative Paul Ryan’s proposal to transform Medicare.
But here is what no one can figure out: what Americans want when it comes to sickness and the state. One of the changes Americans decided to believe in when they elected Obama in 2008 was health care reform, a central plank in his political platform. Yet when he actually acted on his health care pledge, it suddenly seemed as if the issue were anathema to voters.