Wednesday, October 16, 2013

US Government shut-down. The cost of democracy?

For the past two weeks the other side of the Atlantic became the focus of the global news, stealing the limelight from Europe for a change. Our continent has been providing news stories for the past good few years, with the way it struggles to deal with its economic and political crisis.

But this time America is the epicenter of a political and ideological row, that potentially can result to consequences that will reach beyond the country's borders. And as much as this saga seems very ridiculous to most of us outside the US, it is very serious for the parties involved and that makes it very serious for the rest of world.

Since America is the world's leading power politically and economically, what happens there could send ripples throughout the globe, especially through Europe that is so close to America. The US found itself being paralyzed by federal government shutdown, due to the inability of the Republicans and the Democrats to agree on how to deal with the country's public debt and an "ideological crusade," as Mr. Obama called the Republican's opposition on the issue. 

A government shutdown in the US is not something unheard of, though it is the first time that an agreement has not been reached within a few days and both sides are so staunchly opposing and blocking any progress. The last government shutdown hasn't happened for almost 20 years. In US politics, a government shutdown is the name for the process the Executive Branch must enter into when the Congress creates a "funding gap" by choosing not to or failing to pass legislation funding government operations and agencies. (Wikipedia).

If the interim or full-year appropriations are not enacted into law, the United States Constitution and the Anti-deficiency Act require the federal government to begin a “shutdown” of the affected activities. If the budget crisis continues long enough, then the law requires an obligatory unpaid leave for all non-emergency personnel and curtailment of agency activities and services.(Wikipedia)

A country without a functioning government for a long period of time, because of disagreements and deep rooted divisions is not something that we've never seen before. In Europe, Belgium did not have an official government for years due to the divisions between the country's linguistic groups. Yet the country functioned as normal and Belgium's, Europe's or the global economy did not risk a meltdown.

The issues that led to the US situation have been simmering since the second reelection of Mr. Obama and the so called "Obamacare," or the Patient Protection and Affordable Care Act that the US President and the Democrats supported. As the US federal government is deeply divided in the Republican dominated House of Representatives and the Democrat dominated Senate, this situation only worsens the deadlock and contributes to the government's inability to reach to a decision.

The second major issue is of course about the nation's debt. The conservative Republicans oppose to pass a bill raising the country's debt limit, something that Mr. Obama believes that will cause delays in payments including benefits and government employees' salaries and lead to default on government debt. President Obama urged Congress to raise the debt ceiling without conditions to avoid a default by the United States on government debt. (Wikipedia)

It seems that the USA is not just in a financial but also in an ideological crisis. Key politicians reject any potential solutions purely on economic interests and the ideology they served all these years. The reforms the Democrats support and want to implement, are overall a step in the right direction to end the deep inequalities in the US society. But the Republicans and their hardline position seem to be out of date and out of touch with the needs of the ordinary people.

To achieve these reforms the US government will need to raise more taxes and thus have "more government," something that the Republicans ideologically oppose. And that is why their position in the whole issue is outdated. In modern times a country needs leaders with ideas, not rigid ideology.

Their position can be also explained as a fear that Obamacare will be successful, thus giving more power to the Democrats. So they take the whole country in ransom, just to maintain the political status quo and protect their interests. It is the people of America that gave them the power they have and their role should be serving these people best.

So while they are getting paid to promote the American citizens' interests, they decide to force about 800,000 federal employees in living without pay for the foreseeable future, hurt the country's tourism industry and its image abroad. They do not only jeopardizing America's economy, but the global one as well.

Yalman Onaran of Bloomberg News wrote that the government's failure to raise the debt ceiling and pay its debt would "halt a $5 trillion lending mechanism for investors who rely on Treasuries, blow up borrowing costs for billions of people and companies, ravage the dollar and throw the U.S. and world economies into a recession that probably would become a depression."

Taking into consideration that the existing economic crisis in Europe-that we have to deal and suffer from- originated in the banking system of America , the way that the Republicans are dealing with the issue is extremely outrageous and arrogant.

The Americans do not want to deal with their debt problems in an effective way, nor pay their debts by following responsible economic policies, so the whole world is in danger of facing a much harsher economic reality. All because of a bunch of grey haired conservative folk in American politics and their ideology, that provides to a minority of people in this world great wealth.

Other countries are not only forced into debt, but also are placed under a harsh austerity regime by an organization that is based and controlled by the USA-the IMF- in order to make sure they repay their debts. Yet the US leadership mocks and insults the rest of the world in front of our eyes, by acting immaturely when it comes to dealing with their debt responsibly.

The EU Commission President Mr. José Manuel Barroso said that while the EU was "ridiculed" for its handling of the euro-zone crisis, he would not criticize the United States for its budget deadlock, as this was a "normal" result of democracy. (Euractiv)The real problem though is that the people or parties that cause the US budget deadlock, do not really believe in democracy, rather in oligarchy. Their actions and agenda that they pursue speak for themselves.

The Americans were criticizing Europe for years over its handling of the economic crisis as Mr. Barroso mentioned. Perhaps after this farce and circus they have amused us with, they will become the equal, understanding partners that Europe deserves to have, not the stone throwing allies who live in a glass house.

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